I think 5 rounds of rookies is enough. The guys left are really worthless (usually), and it's a waste of time to draft them, then cut them to prepare for the free agent draft.
I think a 35 man roster is about right...with a 40 man roster, you'd tend to have teams locking up prospects. With the 27 man roster limit at the end of the rookie draft, alot of reasonable prospects get cut into the free agent pool, which helps create the tension between drafting solid prospects in the early rounds of the Free agent draft, versus drafting that useful veteran to fill out your needs.