I agree that Clem would also be a good fit as Boss. Both him and Tess go back to the beginning with Vito,and of course,Clem got Vito involved in his first illegal activity (the rug caper).
As far as Underboss, I actually don't think that either one of them would be content in that position under the other one,so there may be some interesting dynamics involved.
On the Fredo matter,I still have to believe that he would be the worst pick,even if it was only as a "front Boss".