The next FE protagonist

[blah the Prussian]

Nah, noblemen are actually fine by me. What if one made the villain someone who rose to the top and thus the hero has an inferiority complex with them.

[Darkspellmaster]

The thing about the Shepard insert is that no matter what your choices you always wind up in the same situation throughout the game. Sure you can get more allies, but it's not a perfect situation either because some situations are not of your choice, or they only give you A or B, there is no C option that you would normally do.

I think the Avatars do work it's just a question of how to define them more in a way that people can enjoy. I think making them co protagonist works far better then having them be the main lord in this case because of what goes on in the story. Having a character rise in the ranks, or be someone's childhood friend works better because it makes you an outsider looking in and allows the other characters to explain things that are going on better then if you're the main insider and should know all the info that you're getting.

For the next protagonist, I would think a female, maybe someone like Mary Queen of Scots. Have her be in a situation where she has to rival someone in her family and is dealing with the fact that others are trying to put her on a throne that she may not be ready for. Your character could be there to help her or harm her actions based on if you are for Mary herself or if you're for her rival Elizabeth. I would say the person is good, decent, but still has issues as she tries to figure out what to do.

As for the Avatar, I would say that the person you play could come from a lower house who was friends with Smallfolks and Nobles. This person knows about the different aspects of the world but is still learning to handle court as well as the political aspects. Their family has had ties to both sisters via their father or Mother and they have loyalty to both technically as they grew up with both sisters. You have to base your choices of support based on what you learn as you navigate between the two royal houses and decide which would benefit the people more.