You ought to put all of McCusker, North and Fenby in the North Wales side so they can have some local players.
I think Wales should use a county system and have the teams named as counties (a couple may need to be merged counties) instead of regions (really just clubs Cardiff, Newport, Llanelli). That way fans of say Ebbw Vale can support the county they are in instead of feeling they are supporting rivals Newport.
There are so many counties down South, that you end up with a similar problem to before, i.e. what to call them. Simply splitting South Wales into two 'regions' East and West would be the simplest way forward because people do associate themselves with either the East or the West, even if only very loosely in some cases.
Looking at the teams I've proposed, they aren't necessarily stronger than the top Irish, English or French teams. You would hope by going down to 2+1 teams (with the North Wales region getting less money to begin with), there would also be the money to import a small number of top foreign players to compliment the squads in certain positions, not to mention drawing back some of the Welsh players playing elsewhere. Money should also be available to get some high quality, proven coaches in place, foreign if necessary to begin with, but with Welsh coaches being developed in the Premiership. The standard of Welsh coaches is simply shocking.
I agree with McCusker and Fenby being in the North Wales region psychic duck, but North would not develop fully in a development region, so he'd need to be in one of the others imo.
I think that a scheme similar to this would also speed up the development of rugby in North Wales. Having a team to support playing in the Pro12 would be a big deal imo. It may not be the best team ever, but on paper it wouldn't be the worst in the league. The quality of player is better than the Dragons at present.
Maybe there's room in the plan to create a Mid Wales 'region' similar to the current North Wales one. Not entirely sure the population required is present though. I have always believed that a lot of untapped talent is being missed in Mid Wales. I never remember scouts being present at Penweddig matches despite there being some very good players on display, that with the proper coaches could have been developed into regional players.
This exercise has shown me that we currently only have the player pool for two proper regions if we want both to be genuinely competing for both the Pro12 ***le and HC every year. Two strong regions with a third to develop the young players coming through and harness the potential playing talent of North Wales is imo better than having 1 strongish region, 2 mediocre ones and 1 poor one. Unfortunately neither the regions or the fans will likely embrace such a scheme as the old rivalries still dominate Welsh rugby, to its detriment.