I would prefer to keep it at 16 teams.
Except the "Top-dogs", qualification is a big thing in itself and making that too easy would mean no interest in the groups.
Make a qualification for the qualification or, like in other sports, make A, B, C versions.
I don´t know what is happening in Scotland and Rep of Ireland these years but they both got a great history of football and should do better. It isn´t just a lack of numbers, imo.They got around the same population size as Norway, topranked for the WC, and Denmark whose EC history compares ok´ish to Englands.