Up-engine the Caudrons with the G&R 14M? Engine power is incresed in a major way (probably we might get to above 500 km/h? - supposedly the MB.700 was good for 550 km/h), and weight is kept in check. Yes, the radial will add some drag, however the 14M was pretty small engine to begin with.
BTW - leaving the more menacing enemy fighter to the own better fighters does not work, since it requires the enemy to cooperate, and Germans were - for their reasons - not willing to cooperate with many people back in ww2.
Good point on the powerful 20mm cannons being a great anti-armor asset in 1940. It will require some foresight on the part of AdA to see that opportunity and supply the AP ammo, though.
French politics were to blame to a lot of things.
Their aircraft and aero engines were also behind what Germans were making, though, so let's not save the industry from the hook. The mass-produced Potez 63 series tried to do many things, while being bad in doing any that is combat-related. MS.406 was obsolete when compared with Hurricane I, Spitfire or Bf 109E, despite being of same generation. HS 12Y was a full generation behind the Merlin or DB 601. The G&R 14M was a nice, small engine, but what was needed for the 1st line A/C was a powerful radial (talk 1300 HP, and hopefully 1500), not something good for 700 HP.
Whoever approved the HS starts making radial engines was deserving the nice, hot cell in the Devil's Island prison.
That MS.406 was harder to mass produce than the 2-engined Potet 63 series is mind-boggling.