The daily limit of 660,000 transactions isn't an issue. Payouts would only be done using one transaction per block, the coinbase transaction, which does not necessarily need to be limited to an arbitrary number of outputs.
Yes, it does need to be limited. Every output, even in the coinbase transaction, takes up bytes, and the blocksize has a very hard limit.
Don't know how we got here, but I never said that ALL miners would receive DAILY payments. Shares would grow in size and/or age until they qualified for a payout. A 1TH miner might get a daily, while a 1GH miner might get a weekly or monthly. Someone who only ever mined a few satoshi worth might not get a payout for several weeks.
The limits on block and transaction sizes are arbitrary and will need to be increased over time to accommodate an increase in transaction volume. Considering the arbitrary nature of those limits, there's no reason that the limit on the coinbase transaction couldn't be modified to accommodate enough outputs to pay an equal mix of LARGE and OLD shares to the exhaustion of the block reward. I don't think that it would take all that many outputs... several hundred at least, but probably not more than a thousand or so, which may not even require a modification of the limit.