This is a good, thought-provoking discussion - enjoying it. I agree with the view that several people have expressed: the hard part is that when you lose a couple of coin tosses, you're dead in the water. I'm considering dropping one of my teams if recruiting doesn't go well this season because due to a couple of crappy coin toss years, I have seven openings and can't see a path forward without a good haul this time around. That can't possibly be what WIS wants.
I think the solution isn't to expand the number of available recruits, especially not top-tier recruits - as has been mentioned, we don't want to have two dozen all-star teams with 850 average ratings in any given world. I also don't see a reason to generate an additional pool of players for the second cycle. My solution is simpler: just push up the baseline for recruit quality at each of the D1, D2, and D3 levels. To me, the problem is that we see things like a big man with 34 ATH or a guard with 46 SPD or anyone with a 17 DEF (in all cases, the hypothetical numbers are meant to be ultimate ratings after they have achieved their potential). These guys are just useless, and no human coach would take them (unless under very unusual circumstances). If there were more recruits who at least could play roles and not be absolutely horrific, then a coach could use his AP to at least get someone helpful - not a stud, but not a useless piece of crap either - in the second cycle. It would also raise the quality of AI teams, as they wouldn't be starting five guys that no human coach would ever recruit. So it takes care of a couple of issues without causing a ton of problems, unless I am missing something.