SMEE - Have advocated the following solution in the past and think it is truly the only way forward for Scotland in the future if we are to have any chance of qualifying for World Cup Finals or European Championships --
Create a North Atlantic qualifying region consisting of Iceland, Faeroe Islands, Greenland ( assist/fund them to enter as a full FIFA rep ), Northern Ireland and Scotland. Top two teams in the group qualify for any finals. This puts us up against countries/competition very similar in capability and aspiration to our own levels. This would give us a genuine opportunity to qualify for finals in the future, where we can then be absolutely tanked by all the other finalists.
The other alternative is to create separate competitions for genuine third rate teams like Scotland - so we have a chance to win a little trophy and some medals
Or due to the amount of European countries these days we enhance the tournament to 24 teams and have extra teams qualifying. We would then have a better chance of qualifying and then getting absolutely humped at the tournament.