I would say that I don't think that the fringe players are necessarily going to have that much of an impact on squad morale. Take Chelsea, I can't imagine that players like Broja, Kepa, Lukaku, Anjorin or Sarr are going to have that much of an impact on overall team morale (as long as they're at another club on loan and aren't an influential player integral to the dressing room).
However, I think it's something that we all barely experience problems with, you sign an 18 year old to a 5 year deal and after 3 years of no complaints you either offer them a new deal and keep loaning them out, sell them a window later as their value has increased due to the contract length or they become one of the lucky few that get an opportunity to sit on your bench and maybe end up actually becoming part of the team. At no point have I really struggled to keep a young and exciting player who isn't quite ready for first team football, any loan seems to completely pacify any player. Even if it's a bad loan and they don't play as much as they'd like they don't blame the player they're just unhappy at the club they're on loan at.
It may be asking too much but I'd love a system that reguarly challenged the player to keep these talents and a completely different player reaction to loans and development. I'd like more players who overinflate their ability and you have to convince them of a pathway through loans or play them ahead of better players to keep them or lose them through transfer requests and refusal to sign contracts, as frustrating as it could be. After each loan the player could drastically change their own view of their abilities and place, for good and bad. A good loan at a decent level club should have a player demanding to be included in the first team, a step up in loan quality or to leave permanently regardless of the length remaining on the contract. A bad loan could have the reverse effect, such as players dropping demands to be in the first team or losing confidence in being ever able to play for the parent club first team and therefore asking to leave permanently.
I personally take lots of punts on grunts when I'm playing the game and loan them out perpetually until they either make it or become clear that they'll be of no use to me and I sell. I think this should come with far more downsides with the very real potential to lose promising players because of this very way of managing. Looking at some of the players Chelsea have lost (De Bruyne & Salah) it should be harder to keep them individually happy as in real life they would be clamouring for permanent moves once they felt the pathway to a Chelsea first team spot was no longer viable. It may be too much to ask because it kind of requires players looking at and understanding the history of players at the club, ie am I moving to a club that reguarly loans out 60 players a season and very rarely actually promotes these to the first team or am I being asked to go out on loan as part of a select few who have an actual reasonable chance of making it at the parent club.