Basically it is obvious that the paladin needs some sort of AoE heal but nothing amazing because you don't want every class to be able to do the same things. You dont want a pally looking exactly like a priest and so on.
So my idea consists of giving paladins a talent in the holy tree which gives them a spell that is activated after receiving holy power from casting healing spells. Once a certain level of holy power is accumulated, then a single AoE spell may be cast.
E.g. Holy Light is cast 3 times then the ability is activated and ready to be cast. Or Flash of Light is cast 5/6 times then the same spell is available for use. By giving pallys the ability to only stack either the FoL buff or the Holy Light buff at one time, limits the spell so that it isn't overpowered. Also considering adding flexibility to the spell and making the FoL use of the spell different from the Holy Light use.
Also in regards to mana consumption you could put an increased mana cost on the spell when it is used with the FoL stacking so that you cant just spam FoL and get a powerful AoE heal equal to the heal gained from using Holy Light at an increased mana cost. Just a quick idea I came up with while I was reading your blog.
It's an interesting idea. However, it might not be "different enough" from Circle of Healing or Wild Growth. Both of those spells have a 6 second cooldown. It would take about 6s to cast 3 Holy Lights or 4-5 Flash of Lights. So in actual game play, it might end up playing just like CoH or WG does now. I'm not sure Blizzard wants to give us something equivalent to CoH.
It's not exactly the same, I know. For one thing, you can't cast the AoE spell at the start of the fight, you have to charge it up. However, I think it would end up being too close to CoH/WG for Blizzard to be comfortable giving something like it to paladins.
Like, if you look at the new AoE spells coming in Cataclysm, the shaman's Healing Rain and the paladin's Healing Hands, both those spells are continuous area-of-effect spells. Thus they will have very different gameplay than CoH/WG, and I think that is what Blizzard is aiming for.