And how slow is a freight from Peterborough-Ely going to be via that route? Will blow up headways by quite some margin from the current 50mph through North Jn.
Quite - the West Curve is sharp enough to need check rails on the south end curve.
The current junction layout was designed to maximise the speeds through it on the busiest route (the Ely-March one), compared to the historical layout which had the Norwich line as the 'main' line. This is really important for the long freights that use it (e.g. I was at Ely on Wednesday evening last week, and at one point there was a procession of three or four freights heading for Felixstowe only a few minutes apart).
If there was a cheap/easy solution to the level crossing problem it would probably have already been done - I don't think there is. The problem is compounded by the 'squidgy' nature of the ground in that area, which makes building bridges and underpasses more difficult. The 'lake' to the south of the curve is an ex-chalk or gravel pit, so it's deep and steep sided - not ideal for putting bridge piers in I suspect.
One thing that could do with fixing (for freight) is replacing or refurbishing the two bridges over the river just north of Ely station - they impose a 20 mph restriction for freight, which means anything full length running northbound (or starting from the goods loop) can't start accelerating properly until the last wagon has cleared the 2nd bridge. By that point the front of a 770m train is only 500-600m from North Junction, so I suspect it's not going to get to 50 mph by the time it gets there... Same issue southbound, compounded by what seems to be frequent signal-checking of trains on the approach to Ely station, bringing freights to a stand which then have to accelerate hard to get to even 20 mph. And as for blocking Platform 3 with a terminating GN train for about half of every off-peak hour - at a busy-with-train-movements station with only three platforms - makes me wonder if the DfT cares about rail freight capacity at all...(it's not that freight would otherwise run through platform 3, it's the extra load on the other two platforms, which are on the main running lines, seems to result in more delays to the freights than used to happen).