Re: On Koryu
I'm not sure I'd use Ueshiba Sensei or aikido in general as a paragon of internal arts teaching... By all accounts, teaching skills were not his strong suit, and there's been lots of discussion here about the *lack* of a coherent teaching approach (internal or external-focused) in most branches of modern aikido.
An important thing to remember is that the phenomenon of the massive seminar with 50-100+ people is very very new. Koryu were always taught in small groups. Pre-war aikido was always taught in small groups. Small groups allow much more hands-on instruction, much more customized instruction, and much more direct feedback to the students.