First of all GMs do not have the ability to add human players to a division (or do anything close to it). It is only the BBs who can do this.
Second everything should be sorted out when the new season starts (hopefully).
Inactive teams will be hard to fix because it requires a lot of manual moving and makes the playoffs in lower divisions pretty pointless (apart from winning a cup). The other options is to assign new players to higher division which means people who have been playing longer get annoyed because someone newer has started above them.
This problem will take time to fix. Active players will eventually fill the top divisions but they will have to filter up slowly and there is no real way of fixing this.