The problem remains that M16 magazine well that requires a straight section of magazine inside the well, transitioning to a curved configuration outside the mag well, the cause of most M16 feeding failures- as it is on the Armalite AR18, Galil with M16 magazine conversion [the Galil prototypes used Stoner 63 magazines, which work] and other weapons using the M16 magazine.
Box magazines for the M16 were made in 25-round capacities, similar to those used for the first versions of the French FAMAS F1 bullpup, one good answer to the M16s lower configuration. And with a cartridge change, that might well be made to work just fine with the M16A1/A2 lowers.
Or a new weapon alltogether, probably using plastic magazines, can be used. I've been pretty happy with those of the AK74/AN94 in the Russian 5,45mm caliber, so it can be done. And I wonder if one answer might be opening the Russian 5,45mm to use a .276/7mm bullet, a nice compromise between the 6.8mm and the original Kalishnikov 7,62x39mm- and very reminiscent of the British .270/30, [AKA the 7x43mm] for which the original test versions of the British FALs were chambered, dropped for the 7,62x51mm NATO instead. The Brits may have had the right idea all along- and in the bullpup British EM-2, the cartridge was said to be capable of dropping a man at 700 yards. The Brits were still keeping their claws hooked into their global empire then, and from India to Kenya, Malaya to Kenya and Rhodesia, a reliable automatic military rifle was still a necessity.