I think the framework you're describing sounds interesting and fun enough to have a go at once there's something to try and I would be interested in seeing the progress your team makes as progress is made.
As mentioned above, there is a lot of detailed information that could change the opinion any single person has about your game, but I think there's enough there to give your team something to work on. Personally, the most fun I had while playing Star Wars: Galaxies was in the Jump to Lightspeed expansion that allowed for space combat. It was really quite a lot of fun, but I felt that things like being able to "
cut engines, flip around and shoot at someone on your six while still traveling away from them," a la Babylon 5. That's still one of my favorite sci-fi shows even after all these years (the CGI is now somewhat cringe-worthy, but still holds up pretty well for the budget the show had) and the space combat in the show was one of the reasons for that. It is much more realistic in terms of the laws of physics and how things move in space, with all the problems and opportunities that that entails, and it sounds like your concept follows that logic which is great.
As far as small indie teams, I'm not familiar with many, but I know of one in a similar situation as what you're describing. As nearly anyone who's seen my posts in the PC Gaming Discussion board knows, my favorite game right now is a post-apocalyptic MMO being made by a group of four indie developers in Russia. The game has huge goals and after five years in open beta, it's finally getting close to being a "finished" product. As an MMO, it's in what the devs all "live development" and they have plenty more planned so, like many MMOs, it won't be "finished" until the servers go dark, but I think you get my meaning. It's a F2P skills-based game (no classes or skill limitations) with no achievement system other than skill levels, but it's also an RCE. In case you're unfamiliar with that acronym, it's short for "real cash economy," which means that you can buy in-game money with real-world money at a rate of ten-to-one (ten game dollars per US dollar), but you can (when the feature is enabled) also sell in-game money for real-world money too. This adds a huge incentive for cheaters/scammers/exploiters and the like, especially because there's not going to be a beta wipe when the "live" patch is pushed out. So they've had to work very hard to keep track of what's going on in the game to prevent any single person from destroying the game before it really gets started. That means time not spent on developing the game, so I'm sure that has been a big factor in extending the beta phase so long.
They decided on the Torque Game Engine Advanced due to its low licensing cost from the start and for a few other reasons and the live update upgrades to the Torque 3D engine. There's apparently lots of existing assets for it, but they've decided to custom-code a very large portion of the game (for reasons they haven't fully described) and I'm sure that this has also been a big reason for the long beta. The fact that they've had to re-write 80% of their custom code for T3D (which has also not been described very much) along with everything else makes it easy to see why it's taken them so long. Many of the players have become unhappy with the length of time and have left for the time being, but many others like the game enough to have stuck around through it all because of the game play and the game's potential.
Long story slightly longer, a huge game with lots of features and great playability can be done, but expect a very long development stage to even get the thing off the ground. If if you get the basics right at the start, you'll have die-hard fans that will stick with you, but be sure to communicate with your community. That's the biggest problem with the devs making AfterWorld, they rarely make any public statements about what's going on with the game and it makes people feel like nothing is happening.