It could be an interesting idea, though I think the KOTR concept would need to be overhauled to get the most out of it as a means of keeping this tournament as feeling different from the CWC or the Mae Young Classic. For one thing, I'd do away with all the cheesy gimmicks of the crown, the scepter, the cape and throne. They're outdated, inaccurate and hokey stereotypes of old fashioned American takes on European monarchy, especially the British, and I don't think it's something that fits the modern age all that well.
I'd go the route of creating a nice, majestic looking championship belt that incorporates some of those aspects of royalty, including having a majestic crown as part of the center plate, have the KOTR logo in the plate as well, etc. The KOTR holds said championship until he gets his opportunity to challenge for his opportunity to go after the NXT Championship. I'd make it so that the winner gets to name when he gets his title opportunity, but the champion has to be informed in advance as I don't think they should make it just another MITB gimmick.
I'd also go the route of making it a round robin tournament consisting of 8 or 10 wrestlers who face each other over a period of maybe a couple of months, including NXT house shows. I feel a round robin tournament gives more of a feeling of "anything can happen" or at least the notion that upset victories can and will happen sometimes. I also think a key to making it feel like a significant deal is that all the wrestlers involved are booked to come off as credible, viable competitors rather than just being 2 or 3 legit contenders to win while the rest of them are just there as little more than window dressing. As for a point system, I'd keep it simple with each match having a 20 or 30 minute time limit, 5 points for win by pinfall, 7 points for win by submission, no points for count outs or DQ as I think it might help give the matches a sense of urgency in that you can't take a cheap way out and still expect to collect points. Every so often, some of the matches could be gimmick matches such as a last man standing match, maybe a falls count anywhere match, to throw a little variety into things. The two with the most points accumulated meet in a one on one match, a 60 minute ironman match, with the winner becoming King of the Ring and getting an opportunity at the NXT Championship of his choosing.