I dont like prohibiting AGC units to go south, as it takes one of the few strategic tools the Germans have in their pocket. You could just agree in a set of houserules which pockets in the South are allowed to be created (Rovno, Kovel, Lvov, Proskurov etc.)
I believe under current rules, if the Germans go with a "historical" start, they may as well just surrender. The main problem with historical approaches is that in real life its the Soviet mistakes that allowed German advance - with player hindsight and "realistic" settings every game should grind to a halt near Smolensk. Thats why the game has to "overdo" with the unit quality disproportion to make up for operational/strategic mistakes that were present in history but are not in the game. The same is true for the later stages, where German commander wont make a Stalingradey/Bagrationey type of error, so the game emulates that for him with national morale and TOE changes.
If I were to influence the game design/patching, I would have suggested to get rid of some (most?) of the reinforcements schedule for the Soviets as well as the ridiculous 40AP per division creation cost, and allow the Soviet player to create units on his own to tailor his army. There could be two different kinds of divisions created, a more costly one with higher starting morale and cheaper with lower. The amount of AP received each turn should also be amended. This way the Soviet player would have to decide, if he wants a smaller but better army, or bigger but crappier. It would also provide tools to solve the problem with not enough Soviet counters on map that can occur in some games. In general my approach would be to give more tools to the players, and less railroading them to a historical outcome.