Palmerston North is unique, unlike Ardmore's uniqueness (even though comparisons can, and are being made).
Ardmore has a designated training area now called a GAA with defined lateral and upper limits and a relatively similar mix of aircraft - IFR aircraft are vectored around the airspace. It may take an extra 15mins of flying time to find a patch of clear airspace in the training area, but it can be found.
Palmerston North has no designated training area, although (as DeadHead has pointed out) there is a GAA area to the north which can only be activated with approval of Ohakea. There is a mix of IFR, VFR and military aircraft (don't forget the gliders at Feilding) - all at differing speeds, 3 airfield within a 10nm radius of Palmerston - combined with a differing level of experience and understanding of the English language (Massey often has foreign students flying solo, whose first language is not english).
Fragnasty
See and be seen works if you are diligent with your lookout, and use the radio to build your SA of what's going on around you. If you're out there practising forced landings in particular, you should have cleared the area you're going to descend into before you start - it is a practise after all.
Speaking up is all very well, provided the pilots have the level of experience to understand what is being said and, if you have 5-10 aircraft in the same area all chatting away, how much info is too much and ends up getting ignored?
Palmerston is also restricted by the weather, prevailling westerlies often prevent the use of the area to the east of the Manawatu Gorge due to turbulence and low cloud.
The area that is available for training is small in comparison to Ardmore, so maintaining an effective lookout and good SA is essential. We all know from our years as trainee pilots how difficult it is to maintain good SA, while practising solo manoeuvres such as stalling and PFLWOP. How easy is it for a low hour pilot to judge closing speed and distance?
MOR
Personally I can't see any point at all in doing FLWOP/PFLs down to 500', it is that last 500' that determines the outcome of the exercise. We always used to go down to 50' or so, by then you know whether you are going to get in or not.
I was not aware the the legal lower limit had been reduced, and advocating that student pilots follow the same practice is unbelievable and bordering on the dangerous.
All this discussion lead into others questions, as it was mentioned that the aircraft were at 90 degrees to each other. Is the Cherokee a suitable aircraft for training and ...
What procedure should be used when climbing out after forced landing practice - climb straight ahead, or climbing turn to remain over the field until at a suitable altitude?