This idea (or something like it) is such a no brainer that I refuse to believe the NRL aren't working on something like it as we speak.
We suggested something similar last year, with the main difference being you'd play the 'Western Sydney Cup' over three consecutive weeks with the 'final' being a double header at homebush:
http://www.footyfootyfooty.com/2010/07/new-section-plus-western-sydney-cup.html
Well there you go, hopefully the NRL sees the light.
I think we need to have all Western Sydney teams play each other twice no matter - I think that needs to happen with all rivalry games.
Re: Western Sydney Cup - I see what you're getting at with the condensing of the format. I was thinking that 1 round a month would get people's attention and maximise people's attention.
Perhaps though it could go:
Late March - Week 1 - 2 games on same weekend to kickstart it with membership drives
April - Week 2 - 2 games on same weekend
May - Week 3 & 4 - 2 games over 2 weeks unaffected from Origin
June - Week 5 & 6 - 2 games over 2 weeks unaffected from Origin
July after Origin ends - Week 7 - 2 games on same weekend to build up again, fan days etc
Early August - Week 8 - Final 2 games on same weekend