arbitrary: based on random chance or personal whim, rather than any reason or system
not something I've given a moment of thought to. I'm not aware of anyone proposing an arbitrary champion for any conferences or for the nation.
not sure where you're going here. The 7-5 team can end up being a conference champ over a 12-0 team because each conference sets its own rules for organizing their teams and determining a conference champ. Most FBS conferences (all now?) have chosen to move toward a division format with a CCG. As I understand it, the trend was driven by financial motivations.
I suspect there's no turning back, but I thought the system pre-Bowl Alliance (before 1995) was damn near perfect -- smaller conferences with a more localized geographic footprint, tighter academic standards and more uniform recruiting territories, where each team played all but 1 - 2 other conference teams each year, and had a decisive system for crowning their own champions, with no notion of a consensus 'national champion'. My remaining hope is that with near-future changes to content distribution, the financial motivation for large conferences goes away and we might see some contraction. There is precedent -- in the 1920's and '30's, the Southern conference included > 20 members at one point (including current ACC and SEC schools).