There's your root cause of the problem. When the refs start putting people into the penalty box, the tough guys start losing ice time, get ejected from a game, get suspended and/or banned from the league.
You are always going to have rough play, and jerks on the ice. The list of suspended players gets pretty long when the refs are doing their job, but it should send a message as the cost to play a season isn't cheap and no refunds are given.
The team captains should be going to the league director about things like sandbagging, bad refereeing, and players purposely injuring someone else. If they don't do that, the league director thinks everything is going fine.
There were problems in our league, and team captains did complain.
For uncalled penalties, the league would assign two refs to a game to mainly have a second set of eyes to catch penalties.
For sand-bagging, the one thing the league did was a player could only score up to three goals in a game in the lowest league. So, if there was a Gretzky skating circles around everyone and sniping the goalies, he topped out after his third goal and would need to pass the puck so the team could score more, or he would play D, to stop offensive pressure. It was kind of effective as most ringers would be able to get their three goals within the first or second period.