PL clubs would be restricted to 2 non-EU players in their 25 man squad, as long as they don't have EU 2nd nationality but lower league clubs would be able to buy those players as well. So its not a massive advantage or change really as there are already work permit issues in buying non-EU players already in place.
As for hoovering up all the young talent, the lower league clubs can command their price. Hughes at Derby for example, highly sought after talent, but his asking price is very high for a player under 21 and has no PL experience.
The problem is the English players already at the bigger clubs. The loan sort of works for them, when they are under 23. The problem comes at the 21-23 age. By that time its make or break time, they are either going to break into the parent clubs squad or they aren't and if they aren't they need to be ready to move on. Problem is too many aren't and they waste crucial years going on loan (again). Perhaps making it a rule that players over 21 (or 23) can't be loaned out.
Also British players need to be more open to the idea of going abroad to play.