This post is entirely my opinion. I hope this is obvious. I consider myself an L5R purist, which doesn't really mean anything, especially because my "perfect" L5R could be different from yours. And I'll probably get some things wrong, too.
Part 1: Nostalgia
I was born in 1986, and L5R was my prominent hobby during my formative years. I played L5R from the beginning, and in nearly every form. The CCG, RPG, Clan War, Disk Wars, a dice game I can't remember the name of. I remember the Day of Thunder as it happened. I will never forget opening the Crane starter deck that had Togashi Yokuni, and knowing I would always play Dragon Clan, and then being completely amazed when I found out he was an ACTUAL DRAGON, and the heartbreak of his sacrifice. And of course the smell of opening the packs. As a youth, I dreamed of living in Rokugan and wondering if I would be a Mirumoto or a Togashi. And with the RPG, I didn't have to dream.
Part 2: What L5R is to me (and why I stopped)
L5R is a game about samurai conflict in a warring state. The key word there is samurai. Looking back at the origin of the game, the characters felt human. My interest began to fade right around the time riding sea dragons became a thing. Magic always was a part of Rokugan, but it became so high magic that the characters felt less human and the game felt less authentic (and I use that term loosely) to the samurai genre.
The right amount of magic in Rokugan is this: you barely notice when it is there, and you barely notice when it is not there. Of course, powerful displays of magic have always been embedded within the rich history of Rokugan, as they should continue to be. But I'd rather "mystical" be the appropriate term, rather than "magical". Present, but subtle.
Part 3: Redesigning (Thematically)
It's time to write a new story. The origin of Rokugan, the great Kami and their Clans, is a great starting point. Keep that. Everything else can go. Find a way to tell a new story with completely new characters, but make the story about samurai drama. There are so many tales that could be told. Every battle has a unique story, every Winter Court, but the most memorable stories are those that are grounded in the human element. Draw from Japanase folklore and mythology. Make it personable, and show the struggle of balancing honor and duty, duty and self.
"Everything else can go" is scary, but nobody is taking any memories or accomplishments away. A timeline where the Battle of Beiden Pass doesn't exist is weird to me, but quite frankly, it is also the only reason I am here and posting this: a completely fresh look at L5R and Rokugan. For me, wiping the slate clean is the most appealing for the future. The past will always be there as players of a game, but it doesn't have to be as characters within Rokugan.
Simplify. Each Great Clan was originally based on a tenent of Bushido. Scale back to the original seven. I'm sure there is still room in the design to somehow include Minor Clans, mytical creatures, and ronin. But focus on making the Great Clans great. Focus on their conflicts.
Part 4: Redesigning (Mechanically)
Make L5R YOUR own game. Don't make it a re-hash of AEG's game. Start with an idea, or a set of ideals (samurai, honor, politiics, war, duels, etc) and make a game to fit them. Pretend you've never played the CCG or the RPG. Test your mechanics. And test them again and again, try to break them. Make the game simple enough to balance, but complex enough that SKILL is the prominent deciding factor for who wins. Never make a play style that doesn't let the other player or players play.