I'll throw in agreement with @deadculture, Scenario 1 wounds like it could be a great setting. Usual the historical mu* caveat that deviations may abound (that most folks ignore anyone on historical mu*s to argue, cause historical minded folks enjoy arguing), it does have a lot of potential.
That said, I feel like the rough thing in the new L5R is that it's still roll and keep but now its roll and keep with meaningful options/decisionmaking, meaning every roll is a two-step process. You can't simply put in a +command and even get a success/failure message. That alone seems like it's going to be incredibly slow to resolve in a MU setting.