I think Mephiseles's idea of the solar system mod is a very good take on this idea. I must confess to not actually playing the game, i very rarely play other peoples mod's at the moment. But its ideas of less than 10 systems, TC and focusing on many less factions , but a unique feel to the game is obviously more advanced than simly adding a bunch of very similar bases and basic systems.
I see no reason why, if you were creating an OpenSp mod to have a difficulty rating of D4-19 within the starting system. As long as its well made and you have clear laws like, "If you want to go searching around nonlootable asteroid fields on the edge of the system, then go ahead but beware, you're gonna get your ass kicked".
The tradelanes would be a lower difficulty rating and would have frequent millitary/police patrols. Obviously in some regions the police would be more scarce and the pirates more dangerous. The jumpholes between systems would be within the outer reaches of the system so you could trade better if you use them, obviously you might have to work for it.
As a passing reference, I think the whole idea of bribes are a very bad idea as it takes away the need to work for reputation. How many times have we just paid off the corsairs or outcasts for just one mission's pay? The factions work a lot better if you begin set to a faction and if you want to change, then it has to be gradual. Maybe spending the odd evening just working towards gaining reputation and being able to buy the factions equipment.
I will have a go at doing a more compact mod once i finish the ver1.0 of what i'm on now. Its as much a test to see how much you can squeeze into a smaller mod as it is fitting as much as you can into a bigger one.