I have noticed that many seem to be opposed to procedural engines and they may not be possible with KSP's engine beyond solid rocket motors.
Instead, Squad could apply their fuel tank template scheme to engines. There could be 4 engine sizes per engine type, with each size twice as powerful as the previous one. Each engine engine size would also be compatible with one of the 4 attachment point sizes (radii).
This partially exists with rocket engines. I would like to see more sizes of turbojets, ramjets, hybrid rockets, and even ion engines. Currently, my larger SSTO craft look a little silly with their swarms of undersized atmospheric engines.