Yup, the SNK yellow topped rotaries that were in Ikari Warriors among others. Although there were only a few rotary games, a rotary stick was one of my requirements when I first started.
When you say "increasing the size of the actuator", do you mean the stick or the microswitch? The stick has a round shaft with a plastic shell around it that actually makes contact with the switches. I was sorta thinking that if I found a plastic disc that fit, I could slip that over the shaft and increase the size slightly. That sounds similar to what you are saying, yes? That might work, but I was hoping for something more "arcade quality". Swapping switches would be a more permanent fix that wouldn't be as prone to maintenance. I could certainly try tape or heat shrink, but I don't think they would last very long.
Second question...not nearly as important to me...
The other thing I was wondering is about 4-way operation. Since this has a square restrictor gate, that is located on the top, can I simply block off the corners physically to make it a 4-way stick? I was thinking some kind of device that dropped pins into the corners to keep the stick from actuating both direction switches at once.