No worries, I like the fact you've found it inspiring!
Truth be told, this weapon is meant for a setting where laser weapons and money are hard to get, whereas high-strenght characters or flying armor aren't. It is balanced with other firearms in mind, NOT with lasers, which are just superior in so many ways there could be no competition. Another problem, the only enemy you could realistically consider a natural target for the HMG is a Cyberdisc, normal aliens are way too squishy for the increased firepower to matter that much.
Anyway, adressing your points...
A) Sorry, but reaction shot simply makes no sense to me in the light of how I understand combat in X-COM - as in, fast action skirmish, where you have 1-2 seconds to react in a wide arc, not squad combat, where you have the HMG pointed at an exact spot and just waiting for enemies to apear. Swiveling a HMG 45 degrees and opening fire seems very unrealistic in such timeframes where someone else has barely the time to fire a rifle.
B) Having said that, enabling Snap Shot makes sense, as most HMGs are capable of single fire. However, I wanted a narrowly specialized weapon. See below:
C) The way I was using it was: get the HMG to a vantage point, kneel down, end turn. Move scouts forward. Kill spotted target with the HMG. Always have the HMG trooper far out of enemy LOS. That's what the extended accuracy at long ranges is needed for! Basically it was never meant to move-and-fire; you have to plan for the next turn to use it as intended.
D) Scattershot, just nah, this looks stupid. But if you really want, you could maybe reason it away as each shot using a "burst" of ammo, not a single round, and the clip just measures the number of shots remaining. That way you would only have "Snap" fire setting on it.
The "bullet hit" sound is a nice touch
@Solar: seconded, it's stupid (and I think the AI CAN autofire on reaction)