My own preference is to stay without templates, for much the same reason that I dislike TLOS: The positions of the models are a convenient way to roughly approximate what is going on, but in reality they will be in constant motion.
A possible way to remedy the excess hits solution:
Roll a D6 to determine the number of hits against the target unit (Or 6 if Blast). If this is more than the number of models in the target unit, nominate a single model within the unit: excess hits are allocated to other units within 3" until all hits are allocated, or there are no more units within 3".
Allows you to clip characters or splash units in these fringe cases, without any further interpretation. The most game-able thing about it is spreading units out, which is pretty much a non-issue.
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