Online:
Permanent console ban for anyone who creates a lobby called "NO [insert racial slur for blacks/Asians/Indians/Arabs/Latinos]".
In the case of reporting users, you should have a checklist of reasons for why you reported them - bad driving, punting, offensive language, cheating etc. In fact, this should be extended to all games.
An idea from Xbox Live: reputations. If you're a good driver who doesn't hurl abuse at opponents, then players should have the chance to give you a good report. If you like spouting nonsense like "Ha Ha Japan" then players should have the chance to give you a bad report.
You should also be allowed to block people on your block list from entering your public lobbies.
Use filters for race and road cars. If you don't want to race against race cars, you should be allowed to filter them out, and you should be asked if you want to extend this to Race Modified cars too.
And finally, limit the use of the X2010. Seeing as the Ferrari F1 cars and the karts can only be used in one-make events, apply the same rules to the X2010.
Gameplay:
More A-Spec and B-Spec events. I'm not talking about Seasonal Events, but instead events in the normal A-Spec and B-Spec sections. I want to see events like the Evolution Meeting and the Race of the Red Emblem return to GT5.