This sounds like what happened when TFC was released on 164, except plugin stuff was being actively developed back then. I really like the way the B78 server is set up with players able to choose what and how they protect things.
Something like Towny would be really important, HappyDiggers is a happy place where people are free to play, not hiding in fear of murder and pillaging. I have almost no experience with other servers or plugins so I can't suggest anything, but maybe there's an alternative or a workaround out there somewhere, other plugins/mods we've not heard of?
Minimising staff work is important, it's not fair to make them run around checking up on everyone all the time, that's neither quick nor fun, and with less tools it's harder to prove things.
I wouldn't feel particularly safe or relaxed in just a whitelisted server, griefers must enjoy griefing and would happily lie and jump through hoops to prey on the weak and vulnerable.
Paying to enter... we'd probably have most of the regular players who are familiar with the server but that's going to put a lot of people off, and things would still be unprotected. It's important to have noobs so I feel a little better about my accomplishments!
Enabling thieving and pvp I suppose is an option, but there are many servers like that (not necessarily tfc) and I like how different HappyDiggers is. I played a pvp server once, I got familiar with a neighbour, quietly got to level 30 ready to enchant diamond stuff and then he just stabbed me in the back and stole everything. Didn't feel like going back. There would be a lot of hiding in underground bases without any protection and we should be out there building great things.
Another option could be to have a separate server running for B79 if it's going to play so differently and keep the B78 one going, but that probably involves money and I don't expect you to do that.
So, what protection tools are available, and what can they do?