i would vote for a mixed cryopod / "ragdoll" system.
i wouldn't do actual ragdoll bodies though. i would go with an emergency cocoon built into everyone's suits. so if you log out or disconnect, your character would go into the fetal position and the suit would deploy a cocoon around them. this would create a much more manageable "item" to handle. it would also remove the more costly ragdoll physics for more simple box physics.
the cocoon would have a light on it that would be green to show that a live player is inside. if the player/cocoon is killed, the light would turn red to indicate a corpse with inventory. i would also have the players corpse go into cocoon mode some time after death. once the cocoon shows a red light, anyone can loot the contents. if a red light cocoon is empty of any items then it would deconstruct away within a few minutes. if a red light cocoon is not reclaimed/looted it would deconstruct after a set time (a week or a month maybe). all players would be able to bring up their suit HUD to get way-point data for any of their red light cocoons, for the corpse run.
i would have the cocoons movable, in a way similar to how the player picks up and moves companion cubes in the game Portal. so it would be easy for anyone with access to a cocoon, to move it out of the way when needed, without having to kill the player. i would have players automatically exit any work station they may be engaged in before cocooning (except for single person cockpits of course ) so they don't block anything in large multi person ships or stations.
i would then have cryopods (and small ship cockpits) be the protected/buffed logout option (more armour/health, not immunity, and possible buffs for quality rest). they would also act as respawn points upon death (maybe a list of the nth closest cryopods the player has rights to access, or a last cryopod used mechanism).
to stop any abuse in the protected zone, while you could still pick up the cocoons and move them, you wouldn't be able to remove them from the protected zone. so someone may want to build a warehouse for the abandoned cocoons that may end up littering the protected zone.