i haven't handled it before so i won't comment on the first few
points, but
- mag was not interchangeable because they were aiming for a BETTER
design, not compaitbility... ultimately, its the aims u set out to
achieve in the design phase.
- drilling holes into an m16 mag sounds like a good, cheap idea,
but i really doubt the feasibility cos of 2 reasons: structure and
dirt.
u will basically be changing the structural strength and
stress-point by introducing a series of holes into the original
design. if u're not careful, the next time u prone and bump your
mag on the ground, u'll either get an L-shaped mag, or 2 15-round
mags 
crude, but not very effective. also, from the perspective of
implementation, i dun see how it can be "easily" implemented... u
basically gotta dismantle them, base plate, spring and all, and
laser-cut these holes into each mag... the alternative will be to
introduce a new series of M16 mags with the holes pre-fabricated
but if u're spending $$ for new mags anyway, why not just get
plastic, transparent ones?
- 2nd reason: dirt. u'll basically be introducing mud, dirt and all
kinds of foreign objects into the mag. dirty cartridges can cause
stoppages. dirt in the mag-spring can cause stiffness and
no-feeding. water in the mag can cause the spring to rust.
i think there are many design design considerations. if i owned a
rifle, i might consider cutting holes into the mag to see my
rounds. but i think mindef has to think further than that.
since there's no bayonet attachment but troops still need to draw
bayonet, what i would REALLY like to see, is a bayonet with a
built-in wire cutter like the ones commonly used on an
AK47...

bloody simple design, but invaluable in field situation and saves
the section the trouble of having to bring a separate wire
cutter.
but are the tavor and the sar21 based on the same basic design ST
was working with an israeli company at first but they both branched
out into different weapons with the same design...