This is the format that i think would be the best solution. The best way to seed the teams would be simply looking at the 6vs6 ranks on the leaderbords ( i do not like the idea of admins or anybody else just seeding teams by they're "feeling" or "knowledge" because it would cause unneccessary drama) The best teams are there at the top, trust me ;)
The teams that are not in neither of the playoffs are automatically in the division 2 for the next season. Teams that are playing in the loser playoffs are playing for a spot in the division 1 (thinking maybe something like 20 or 24 teams in the division 1 for next season)
This format gives motivation to those that do not get to the playoffs, and even to those who can fight for a spot to the loser playoffs, which means more meaningful, tight and fun games for everyone :)