Describe yourself as a GW2 player

[Flamefang of Arnor]

I think it's easier to get a sense of group out of situations where you get a good frontline going. That naturally happens quite a bit.

In melee (mixed-up) ... and the situation gets manageable quick.

As I stated a little earlier, I can't really speak for PvP zerg related issues. It's good to hear that this isn't so much of a problem there, though.

QFT. Players have no incentive to cooperate efficiently since cooperating in a haphazard manner is sufficient to achieve the goals of both the group and the individual.

Absolutely agreed.

It's funny, isn't it, how many problems in game design can be easily solved by making things harder. Of course, it doesn't sell as well then.

In this case, disagreed, somewhat. I'm sure that's the case for some game design problems, but I wouldn't say that it's the answer to this one; at least not in a direct manner. As I understand it, difficulty can be applied in two different ways: Statistical Difficulty or Complexity. Statistical difficulty simply involves the health, dps, abilities, etc of the opponent vs the player. The more disproportionate the balance between the two, the easier or harder the encounter is. Complexity is a little more vague, but is basically the idea that there is more to an enemy than simple statistics, and that it requires cooperation to defeat and destroy. I don't mean cooperation in the simplest sense, wherein people are marking targets or are using a pre-decided combination of attacks. I mean a situation in which the player and his or her group is forced to actually react in a certain manner to the nature of the opponent. I may be stating the obvious, and wasting my breath along with it, but simply making things statistically harder wouldn't solve this problem in my opinion.

Thus they'll become good groups. Not by players becoming magically good, it's that they have to become good if they want anything done. They will have to become good by creating their own structures - the squad system you mention, or maybe something that fits the game mechanics even better (though I don't know what) would be invented by the players themselves.

Or perhaps this will simply happen once people acclimate to the nature of the game, and once people spread out a little more as stated earlier.

A ranking system would be good, but I think that players should be allowed to form their own groups and assign their own commander.

When I read that little alarm bells and sirens started going off in my brain, and although I hate to be so incredibly pessimistic about what is otherwise a wonderful idea, I've had extended experience with a system like this; and it was bad. Battlefield 2142 had a system, similar to the one you describe, with a system of voting to determine team commanders. I won't go into excessive detail but the only two differences between what you vaguely described and what that game uses, is the number of people per group and the suggestion that people are able to form their own groups; which would perhaps be its sole saving grace. Otherwise the sheer potential for inadequacy in the leadership role would ruin any real prospective gain.