Well, again, scope creep and too much ambition crushed this. The idea was to just grab Galactic Realms warbook and play the game with it... and here we are, very far off from that, trying to change and fix too much.
Here's my post-mortem opinion.
I think we can do two things successfully.
1) Play with an old rule set with minimal changes or alterations (perhaps GLARING issues can be resolved but otherwise play as is, even knowing the game is flawed). So, we can run with Galactic Realms or After Endor rule sets and galaxies, and play the game, knowing that there is no real core mechanic driving game play other than its fun to start battles and build ships and write some story around it. No win conditions, no real economic sense to battles (the cost of conquering a system is probably not recouped for years, etc)...
2) We just give up on rules and switch to a Storyline-only game. We use an honor system. We mix up character and fleet-level stories and have space battles by writing stories, and probably negotiating with each other about winning/losing.
That's it. There's no other option. I don't have time or energy to invent a game from scratch, to test it, and try to make it perfect. So we either embrace a game that existed in the past warts and all knowing that its not always logical in how it works, or we stick to story-only universe where there is no economy or game mechanics, just straight up story and honor system, keeping each other in check if someone starts to go a little to over the top somewhere.