You make some excellent points. I wouldn't be surprised if characters are running through each other in LOTR. There's so much to look at, and if you just spent 4 days rendering final production and your deadline is Tuesday and you notice some dude pass through another one - you're probably going to let it go.
That said, my Actors have a preferred distance from and proximity to allied Actors. They also have a physical "no-touch" radius. This is one of the things I'm working on improving right now. One of the things that has made me happy when I look at some of my larger sims is seeing things like waves and moving columns develop where I hadn't specifically set it up to do so.
As for stepping over dead bodies, I've been contemplating ways to do that. First, you simply add a Barrier entry when someone bites it, denying access to that small area of space altogether. That might work if the bodies start stacking up, but I don't like it. Another solution would be to add the dead character's mesh to the ground reference mesh. Once it's part of the terrain, other Actors would be free to move over it as though it were a bump on the ground. Of course, this means regenerating the Ground search tree, which can take a while. I don't want to be doing that every time someone dies. Maybe a new check could be in order when the script sticks an Actor to the ground - it could check within a small radius of the location of all dead Actors. If the moving Actor is within this radius, the Z-value would be modified slightly to approximate stepping on the body. It would ignore arms and legs - but if everything's moving fast enough, this might be close enough for most cases. Of course, you could always tweak something by hand if it was in slo-mo, or right in front of the camera.
Anyway, thanks for the good thinking.