In my opinion the 35 man limit should be replaced by a hard 40 man limit (which is enforced).
A monthly FA draft would be a BIG MISTAKE in my opinion.

The draft would still be set up so that everyone would normally have 35 at end of draft. If we go to a 40 man limit I think it should be a HARD LIMIT with STRICT ENFORCEMENT.

The extra 5 spots should be enough to deal with the following issues:
1.) Teams that make uneven deals and go over 35 man roster.
2.) Teams that do not have enough pitchers or players to field a team late in the year. The extra spots could be used to pick up scrubs to get them through. I can think of several instances I have seen where a team has three-fourths of their pitchers either worn out or overused the last 2 weeks of a season. The ability to add 5 INN pitchers to get through the last couple weeks would create more realistic pitching use in those situations.

A monthly FA draft in TRADITIONAL LEAGUES would be a BIG MISTAKE in my opinion. For the following reasons:
1.) If quality players were involved it would dilute the pool for the next years league.
2.) Even if it is just a draft of INN players with no future value I think it is a bad idea. Teams should NOT BE REWARDED for failing to draft a team with enough IP and PA. They should be punished by having to take whatever random player TECH sticks them with.

On the subject of past enforcement of roster limit-- I had at least 2 teams last year that were over the limit by 1-3 players for a period of time. I do not remember ever being asked to make cuts .... If I was then that message must have gotten lost somewhere because I don't remember it.

I do think though that if the limit is expanded to 40 that a hard limit would be appropriate. If someone goes over 40 and loses a decent player as a result then that is just their tough luck for not following the rules.