I like the melee system as I feel that it is like the show's fights. However, in the show, it's usually one (or two) on one. As it stands, I only really enjoy playing on either team servers, or melee with a max of 4 players. Anything else gets a bit dull. Oh, and I agree that the swoop speed should be way lower. Only a bit above regular turbo, IMHO. It gets insane now, and they only transform once. :/
How about instead of using primary fire to swoop, the player presses turbo instead? That way you could free up the primary or alt fire for another attack; maybe each char could have their individual attack. For example - Freiza could swipe them with his tail (causing more damage, but with longer recovery time), Goku could do the backbreaker move he did on Neo Freiza (hard to perform since you have to be closer than usual), and Trunks could try to slice them in half (but if they block, the sword breaks).