I would personally prefer it to stay open-world (but wouldn't mind if it changed to instanced like leves)
There are other solutions imo:
1) Make multiple routes to the hamlets (4-5 routes for each hamlet = 40 people/region = 120 people same time)
2) I'm sure other places require stuff too, other than hamlets. So more locations (with 4-5 routes each)
3) Increase the limit of players joining, from 8 to say 15? and the difficulty increases with more participants
Instanced caravans escorts can serve a purpose as well if implemented. Make a red ring around the caravan and if players are outside that zone for a certain amount of time then "You are about to abandon your caravan duty" appears. That's for those good-for-nothing space-takers.
