As for populating the city, something could be done in the way of various prisoners being escorted around Skyrim. Imperials escorted by Thalmor, Stormcloaks escorted by Imperials, etc. As far as I know freeing them at the moment just sends them off where they're never seen again. You could populate Helgen with various faction buildings based on how much you've done for a faction. So once you've joined the Companions, you can make a building. Once you choose either Imperial or Stormcloak, you can make a building. Then the Thieves Guild, Dark Brotherhood, Bards College, Mage College, etc. Building a faction in the town would autopopulate your town with allies of the cause. So build a mage college building, now apprentice mages are walking around, etc. along those lines. Which in turn could act as a conduit for user made quests based on the various factions out of Helgen or general quests like defending it from trolls or hagravens, etc. which are both nearby.