Yep your findings are the same as mine. Very odd transfer, loan and playing time decisions lead to newgens (in the big 5 european nations) not playing enough so not playing for their national teams. In one of my saves I found a 195 CA newgen player who was by far the best player in the world in 2031 and got the goals, assists and avg rating to back it up have a lower reputation than most elite 'real' players. He played for Real Madrid - it took way too long to for a top team to buy him btw. The reputation for newgens has to increase faster somehow - the challenge is that this has a knock on effect on so many other areas of the game including transfers, starting line ups, club vision, player happiness and more.
Tbf though I have only simulated a 5 nation database but I think (?) this is a similar setup what most people play with. As you say I think this is a very big issue for longer term saves. Hopefully the bug reports and the interest in the issue mean it can get solved soon.