Having a Torah-run country is Moshiach.
The punishments are put in place to show how important those Mitzvos are. Shabbos is severe because it is a Chiyuv Skila/Kares, not because you will get killed. The idea of punishing someone with other stuff depends on necessity and is not a Psak Din per se. It is like all other regulations that are put into place to safe-guard society.
As to your last question, I believe that Eidim yes, Hasraa not. This applies to those who chose to live under your jurisdiction.