The correct borders aren't as important as is the treatment of minorities who'd end up at any side of the border.
1. This. Right here.
The reality is - as we can all see from these 1914 ethnographic maps - that much of Central and Eastern Europe, to say nothing of the Balkans was a polyglot mess. It was Balkanized, in short. And that frustrated the Big Four at Versailles to no end. Where do you draw the borders?
The reality is that you can't easily draw borders, unless you want a couple hundred statelets. What you have to do instead is draw the most reasonable borders for viable states that you can, and insist very strongly on federal and even confederal structures to protect the rights of minority communities. And then you try to offset that with a stronger pan-European structure - let us say at least a Free Trade Union/Area for starters. Membership would require basic respect for minority rights, with only a majority vote needed to vote out a member who violates the terms. And even then, in a few instances there may well have to be some "people moving."
To take one example, I would probably give all of Turkish Thrace to Greece, and make Constantinople a Free City under League administration. There was going to be massive population transfers anyway (Greeks out of Asia Minor, Turks out of Thrace and Macedonia); this simply makes for a more viable set of borders. Greece would be told to take it or leave it, with no adventurism in Asia Minor to be tolerated. It also ensures that control of the straits is necessarily an international affair.
2. The other elephant in the room is Germany. There is a consensus that Versailles was the worst of all worlds, punishing Germany just enough to make her deeply resentful, but not enough to deprive her of the power, long-term, to exact revenge. Because a generous peace was simply not going to be in the cards, no matter how much Wilson wanted it, one obvious answer is to head in the other direction: make Germany incapable of being a threat to peace again. And the obvious answer here is to look at her past, and consider a return to her pre-unification state - restoring Germany as a collection of sovereign states (keeping, where possible, princes in place as figurehead constitutional monarchs to preserve as much legitimacy as possible), bound together only by the old German Confederation, with the old Zolverein customs union restored. This probably ought to include the Cisleithanian parts of the old Austro-Hungarian Empire (plus, presumably, Burgenland, though perhaps without South Tyrol or Slovenia). The Czechs would be told: You can keep the Sudetenland, but the price is that you rejoin the old Confederation/Zolverein, and you have devolve some power to the Sudetens in a federal structure. The Germans would be told: Any further political integration within the Confederation requires the approval of the Treaty signatories.
Perhaps Emperor Karl could be kept as a president figurehead as a way to enhance legitimacy; but it's hard to say how practical that would have been. I think he still retained enough respect that he might be a viable figure for that job, especially if his rule over Austria was effectively ended.
Wilson, of course, never really comprehended the need for legitimacy for these states. The monarchies could not be sustained any longer as autocracies; but as constitutional monarchs, they could have provided enough legitimacy to make it harder (harder, not impossible - see Italy) for fascistic groups coming to power. Such an arrangement as I have outlined requires a different Woodrow Wilson, I'm afraid. It also requires Allied Powers willing to undertake a full, if limited, occupation of all of Germany to oversee the transition to restoring the Confederation, and they would have to make that decision by Nov. 9, 1918. And that might be the way to better mollify the French: No, you can't have the Rhineland or the Ruhr, but we're going to break Germany up into small pieces that can't threaten you again, but which you can politically dominate again.
And maybe even set up...a Coal and Steel Community with those states. Just a thought.
