You want uniqueness typing that allows you to have functions that modify the variables without breaking the functional abstraction in straight forward manner. You could also reason about the memory use and have fixed amount of memory. Ordered typing would be nice feature to have. You also want hooks in the compiler for a additional tools for static analysis and proof assistants.
Recursion itself is not bad idea. It's strictly forbidden in safety critical code today for reasons that can go away. If you allow recursion, compiler must be able to reason and define the limits. Recursion is not good idea in safety critical code when it obfuscates the execution, but that is not always the case.
Raw recursion or recursion using recursive schemes?
My turn: What's a recursive scheme?
FP is a tool. It has potential to solve some problems. That potential won't be wasted, but the problems it will solve aren't the problems you have in your world.
On the other hand, FP could be just fine for writing the tools that will help you in your world.