They need an area of grass/gravel (or barrier/wall) on the boundaries of the track so that going off the track is a natural time penalty like in the old days. Corner cutting of tight corners in chicanes will always require there to be track limits penalties (since we have seen in the F2 race at Silverstone how sausage curbs produce a safety hazard, and we saw how tyre stacks don't work well in the 1996 Italian Grand Prix).
Then again, maybe spike strips might provide for an entertaining Grand Prix.
A penalty loop like in motorcycle racing might be a good idea so that cars can serve their small penalties within 3 laps of the penalties being given.