As an alternative to musket balls, we should have shot. Guns loaded with shot would hit in a cone rather than a line, but damage would decrease with distance, proportionate to the angle of the cone of fire. Muskets would have a narrower cone, and pistols wider. The point is to sacrifice damage for ability to hit, as skilled players can easily dodge muskets. I guess shot should do more damage point blank, though.
As for historical accuracy, muskets were commonly loaded with shot for hunting, because they were horribly inaccurate so you couldn't really hit anything with balls unless you had a whole line of musketeers firing at it.