This is a fascinating suggestion, and one that seems like it would solve a lot of problems.
I think the idea of merged leagues while keeping cups national makes a lot of sense: MLS (american soccer) actually works a bit like this-- their are Canadian teams in the league, but they play in their own Canadian cup. I don't think having lower divisions be national would work logistically (what if all the d1 demotees are from the same country? they can't all go to the same national d2 conference or there won't be room for the d3 promotees).
For draftees, the easiest solution is just to have nationality assigned once they're actually put on a team. That way the distribution of players among nations will automatically match the distributions of users per country, and teams still get draftees from their own country.
What if there was a big tournament to decide the placement of teams in the combined nations? Better yet, if there was a way to somehow have the leagues function as they normally do in one season, but have the cup consist of all teams from the countries that will be part of the combined nation. It might be possible to use the cup result to determine placement for the season after?
As long as this was done in arcade mode, a la B3, so that teams could play their A lineup without worrying about it affecting their league competition, it sounds like a pretty good way to handle it. Starting with round robin play (again, like B3) would also be important to avoid having two top teams have to play in the first round, causing one to end up in like d5.