the way i see the problem, not necessarily in order:
1)the top national league is not under control of the national FA.
2)We don't need a successful England team to have full houses at a lot of clubs.
3)The EU employment laws
4)The inability of our clubs to have a cheeky gentlemens agreement over non english players (connected to 4. Most Italian sides, for example, seem to have plenty of italian players)
5)Early age coaching not up to scratch
The thing is, points 1-4 can be eliminated by sorting out point 5. If The FA's of England, Scotland, Wales, and Northern Ireland got together they could sort out the issues easily.
Standardised coaching across the board, free coaching courses for trainee teachers, and a concentrated effort into showing the benefits of playing football well.