Another advantage of penalizing projects with very few ratings is that it encourages people to want to get more ratings
Sorry, not at all. How it really works is (from my experience in 2021):
- you have no idea that there is a penalty, and how many ratings are needed at least to not get the penalty
- you get a few ratings and think it's enough
- jam voting ends
- you get penalized
Encourage and punish are two opposite things.
Personally I would prefer the Ludum Dare system - constant minimum amount of ratings, and a clear message about this.
I’m not sure how small you’re talking about, but if the entire jam only has a few ratings in total then at that point the final results are probably not valid in any case.
And that's the argument for the Ludum Dare system.