Yeah I’m wondering if there is any research into new ways to fix this problem. Or if the solution is just layer 2

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I assume you mean aside from doing lots of normal Layer 1 transactions? My understanding is as long as you're willing to pay a lot of fees, you can accomplish this with normal L1 transactions. And the advice is: do this _now_ while fees are relatively now, because when they're permanently sky high your window of opportunity will be closed forever.

This podcast discusses it at length: https://whatismoneypodcast.com/episodes/bitcoin-utxos-101-with-wicked-smart-bitcoin-wim462-4Jya4Iab

Exactly. I just don’t think “fix it while you’re in a bear market!” Is a viable answer