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RE: How would you like rewards to be allocated?
Seems engagement is largely a function of VP and willingness to upvote comments, as many opportunistic commenters seem to flock to these accounts. Any type of algoritmic rewarding/voting is bound to fail unless true manual curration is factored in as the primary variable. A secondary variable that I think is usefull is the non-usage of bidbots. Aggressive bid bot users are usually easy to identify. They have high reputations that truly don't match their VP status. I would suggest some sort of reward correction based on the VP to raw-reputation ratio.
You're spot on that there's no substitute for manual curation. That said, our goal here is to do the best we can with an algorithm, and I'm sure we can do a lot better than what currently exists.