It is possible to use a different clutch.
We often use the Bob Newby racing clutch with the Fireball builds. It's expensive, but works well.
As Chasfield states, the plate stack is a major culprit in all this, but the springs have a very short travel before they bind up, also.
Making a new type of clutch release that goes thru the outer primary is a real can of worms. You will have issues with the outer primary flexing and cracking, and potentially also leaking. And you will have to engineer and build an entirely new clutch for the bike too.
You can help to reduce the heat in the clutch actuating rod by substituting a ceramic ball bearing into the mechanism in place of the steel ball bearing. This is a very easy mod, and we do it to all Fireballs now. It greatly reduces the friction and heat from that location, and completely prevents the friction-welding of the ball to the release rods.
The old 4-speed has a neutral lever which you can use to avoid downshifting thru the gears when you come to a stop. The 5-speed does not have this.
I personally always downshift as I come to a stop, so I'm always in first or second gear when I roll up to that red light. Easy as pie to put it into neutral at that point, assuming you have kept the clutch in good working order.
Contrary to what the MSF people like to say, I recommend to NEVER EVER hold the clutch in at a stop light or other intersection unless if is just for a few seconds for a quick stop and go.
It is much more likely that the clutch cable could snap, propelling you into the intersection, than it is for a random rear-end collision to occur. In my lifetime of more than a million miles on two wheels, I have NEVER been hit from behind where holding in the clutch could have had any benefit, but I have had many clutch cables snap.