I think one of the biggest challenge with Bitcoin is that there is no standard process to recover a private key.
But BIP 39 exist, where user expected to backup 12 or 24 words securely without ever touching private key directly.
Out of these 7, at least random 5 people must agree to unlock the key. Or Alice & Bob can do it alone, because they are my kids, and I trust them that they would never steal my money. Because we trust people in our life all the time, and, at least my perspective as a bitcoiner, I would rather trust some very close people around me than an anonymous institution like a bank, to solve problem (B) from my introduction text..
I know this is probably the part of multi-sig (which I don't fully understand technically, but the concept).
Your usual multi-sig (N-of-M) address isn't enough. You need to create P2WSH or P2TR with custom spending condition.
But I think the issue is, that those people should not have to carry part of this key with them, but rather having is somehow automatically technically assigned in a way they access the internet (and this data being encrypted).
For mobile network access (SIM), there are MSISDN (phone number), IMSI, ICCID, IMEI (device)
For fixed network access (depending on technology, if xDSL, Docsis or Fiber) it's MSIDN (phone number), OTO number, and/or MAC.
CMIIW, but it means knowing someone else phone number, IMEI or similar data open possibility to steal Bitcoin.