I will reply to your post bit by bit.
The last point is certainly true for the Federalist Party, but when I read how President Nix refers to other Labor Party members as "soldiers" that are needed in other regions and when I see that the Labor Party has been pretty vocal about their past strategic registration attempts in the IDS, I must question that every player is as independent as we would like to think. There have been concerted efforts to make members of a particular party register in a particular region for short-term political gain, that's a fact.
This doesn't affect the effectiveness of strategic registration in any negative way. Parties can send some of their loyal "soldiers" from region A to region B and fill the void that has been created in region A with people from regions C and D. As for the invalidation of votes, only those votes cast by people who have moved to a particular region less than seven days before an election are invalidated. People who strategically register 8 or more days before the election are not affected by this rule.
What should people who aren't from the US do, in your opinion? They have no other choice than to select a random region and, preferably, stay there for some time. For Americans, the easiest and the most logical decision is indeed to pick their home state. Of course, if a few Americans decide to register in an entirely different state that's fine but it gets problematic when new players are systematically encouraged by a certain party to register in a particular region.
That's indeed one of the key points: fun. But systematic attempts at strategic registration kill the fun for many. Again, it's not a problem if a few people decide on their own that they would like to register in a different region, but it's getting troubling for the game if it's done systematically by a particular party.