The area around the city Britain in UO was quite big. It had a forest and extended all the way out to the mountains, where miners could mine in safety..
I would have created a bigger safe zone, also with a few dungeons etc. A player could live safely there while "growing up" (the PK problem was to a large degree, that it scared away newbies), it would even be possible to build houses here, but at some point the yields would be meager compared to the "unsafe" world. Sure, he could continue living there, if he wanted to, but there would be serious incentives to venture outside, where the rewards were bigger.
I would make special ore only drop in the unsafe area. I would have created special wood as well, also only dropping in the unsafe area. That way also harvesters and not only adventurers would have had incentives to venture out.
I would not have doubled the world with two copies. I would not have made two different rulesets. I would have kept everything in the same world, as it was in UO before Trammel. I do know, that it was probably not possible to expand the original world because of how they had built it (one enormous file with all assets that could not be expanded), but given free hands in this thought experiment, that is what I would have done. Alternatively, if I have to talk within realism, I would have made a new original landmass in the same way they made T2A and used that instead.
Statloss solved to a large degree PK'ing. It was a harsh punishment and only the most hardcore would PK after that , as it was easy to get wiped out in a connection loss, or just a connection hiccup (even monsters in dungeons were dangerous in that case). In my opinion PK'ing was definitely down to an acceptable level after statloss got put in.
A player knowing what he was doing was due to the fast recalling almost invulnerable to PK's. The times I got PK'ed myself as an experienced player, was when I tried to fight back, just for fun. I don't remember having not been able to escape if I really wanted to.
I was a quite experienced PvP'er (and also a passtime PK'er, though it was a fairly small occupation), so maybe I just knew better than many others what to do. But then again, isn't a game supposed to be challenging?
Another way to fight PK'ing is to make a systems allowing the players to fight back. A good tracking system while blocking a PK's escape possibilities (recall/gate), which they also did later on. Allow players to take revenge later, even if the PK is blue. Another possibliity would be to chain the characters of an account together (family system maybe?), and then let them all suffer from the reputation of the PK character. Then a player would not be able to hide on another character, as also this one would be open for revenge even as blue.
Blessed items I would never have done. Neither insurance. Both go against the risk vs. reward system, that made UO so exciting.
Yeah statloss was really great, I miss those times.. it was same in tibia.. in these 2 games pkers were a minority of playerbase.
It's just not same thing playing games where it's not as dangerous to be a PK.. where pretty much everyone is a PK.
Reason there is so many pvpers who only played as anti-pks or played in factions only etc is because they were scared of the pk punishments.
I didn't like how tibia did it though which is one of your suggestions..
They made it so anyone can cast a spell which will give your position away no matter where you are in the world.
So right after you pk someone he will type in world chat who pked him and everysingle pvper.. anti pk.. even other pks would hunt you down and with 15 mins ingame lock after killing someone theres usually not much you can do unless you team up with other pks and make a trap for anyone coming after you but even that doesnt usually work out well because most pks are low leveled because they can't really keep progressing in the game after they have pked their first victim because now entire server of pvpers have added your name to their vip list to see when you are online and then instantly start hunting you down as you login.
So PKs in tibia usually powerleveld up chars to around lvl 20-30 and then they starting pking with that one untill its back to lvl 1 from dying many times after pking someone.
And they send the loot to another char before dying so it still turns out into a profit a lot of the times.
Another way is to become the most powerful guild in the game and then pretend and lie and make excuses for reason why you wanted to kill someone because if you don't and they think you're just random pking then the entire server will create an alliance against your pk guild
But I still felt it was more fun pking in uo and tibia than any other game i've played because for one there were a lot of sheep in these games and 2 felt special to be a pk.
My point is that there should be a good punishment but it should also be something that the pk can avoid with skill.
So he can keep progressing in the game and hunting and playing the game.. maybe tibia system would of worked if they just had a level cap because then it would be easier for pks to not be lowleveled compared to anti pks and can at least defend themselves when the whole server tracks them down.