In the ATP (All Time Progressive) league, which started in 1885 and is now playing 1908, we ended up combining the 1899/1900 seasons. No clones were allowed, so each owner had to pick either 1899 or 1900 for each individual player. Your team did not need to be all 1899 or all 1900, but only one version of each player allowed. Nobody was thrilled with the prospect of combining the seasons, but it was the least distasteful option.
The ATP is a 20-team league, but has from the beginning been a dual league, meaning that the AL and NL each use separate, but complete, player pools (no interleague trading, separate drafts for each league,etc.). Thus, it is in effect two parallel 10-team leagues playing the same seasons. The league started as a full 24-team league (or two 12-team leagues), with some below average AAA to fill out rosters. But in contrast to what you are contemplating, we actually contracted to a 20-team league (10-10 format) and eliminated the AAA before the 1898 season. The contraction decision was made at about the same time that we decided to combine 1899/1900. Since the 1903 season we have been in a 5-5-5-5 division format (still keeping AL and NL separate/parallel), which everybody seems to prefer to the 10-10 format we used from 1898-1902. Ideally, we would be able to keep the NL and AL completely separate until the World Series, but unfortunately every useable format requires some measure of interleague play.
Also, although it isn't in response to any of your questions, we have used a draft formula for the last 8-9 seasons, which seems to have worked out alright, although it has taken some getting used to. (I place blame for the concept on bagchucker, because it is fun to blame bagchucker for things.) I think the ATP still has more than half of its original owners after 23 seasons, and it has been remarkably stable even through some major changes.
Hope that helps.