For the AA itself, I would recommend adding another room to the Alley--since it has been made clear that changing the location of the AA isn't an option. I remember a few conventions where the AA was broken up into sections in different rooms--mainly because they did not want to exclude any artists willing to come.
Despite the fact that NDK is trying to be fair by instituting the lottery, they also risk excluding artists who would otherwise enjoy attending. For example, I missed last year and I lost out on the lottery this year--at what point do I realize that I can't consider myself a "returning artist," give up on NDK and focus my efforts on going to other venues like AWA or DragonCon instead?
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The changes in fanart policy also works to discourage the artists whose sole purpose is to "mass produce" fanart and sell it at anime conventions. There are several artists who are notorious for this--to include the one who infamously bought 8 tables at AX's AA a few years ago (which led to additional rules there). Rini's observations are also spot on, as those are additional reasons many AAs have added fanart restrictions.
*soapbox time*
I know many people dislike it, but I think it is a good thing for artists who want to improve. Part of improving is to step beyond the works laid out by other people. For example, most of my resin pieces are original (with me creating new designs every year) and I aim to create at least one original picture for every fanart that I do. Granted I may not sell as many prints as some others who focus on fanart, I am still pleased with the interest and my charms/resin pieces consistently have done well regardless.
On a sentimental note, I lost a dear friend suddenly a couple of years ago. Some of you may know her as Hakubaikou--and she was an amazing artist. We hung out for several years at anime conventions other than NDK, so her loss was pretty hard on many of us who attended AAs with her. What struck me after her passing was that I could look at her artwork and for a blissful moment I can look at them and forget the fact that she gone. While she did some fanarts, they pale in comparison to her original works.
The revelation that many of her friends had at that timeframe was that one will likely never be remembered for fanarts. However, by creating truly inspiring originals, in a sense you can immortalize yourself and leave a beautiful reminder of what you loved enough to create.