I agree that it shouldn't be the whole nation that gets a problem, it should be the player and that's it. Put a decision about that player not being able to play in the world cup and that would be the final of it, why would you want to ban a whole nation? I understand the want to see Italy because they were so good so recently and suddenly they are not even in, but to get a Latin American team and then putting in a European team instead? That doesn't sound like a good plan to me at all.
I would prefer to see something a bit more light, this is a too much of a harsh decision to make based on something so silly, it's not a smart idea to give such a big punishment for something most nations probably do.
The standard procedure when things like this happen is that FIFA basically forfeits the game and gives a 3 - 0 victory to the opposing team.
Since this happened in a few matches, you need to re calculate all those points in the qualifying stage. After you do that, Ecuador ends up not qualifying and Chile takes its place.
Here's one example of exactly the same happening in 2017:
So this can actually happen now.