Since you might actually be designing an external USB 5.25" drive,
Actually it's a universal controller. It'll work with anything that has a standard 34-pin Shugart interface (or can be adapted to a 34-pin Shugart interface).
So Apple Disk II drives are out because of the odd track stepping arrangement (among other things), but things like the Amstrad 3" drives are in, because the interface is straight-Shugart with a few pins repurposed for the 5V power supply.
(In fact, you probably could bolt on a Disk II, but you'd need to add an I/O expander to the I2C port and hack the firmware and/or microcode up a bit.. same applies to the 400K and 800K Mac drives)
what do we know about cranking up the read/write speed of such drives? What are they really capable of while still retaining compatibility?
It depends on the encoding scheme in use. There's a minimum interval between flux transitions -- if you go below that minimum, then you get data R/W problems. That's pretty much why FM can only go to 250kbits/sec while MFM will do 500kbits/sec (or 1Mbit/sec with 3.5in "ED" media and a matching drive).
Basically, FM has a "clock" transition followed by a "data" transition. The clock transition is always present. MFM tweaks this by allowing the "clock" transition to be omitted if there was a data transition in the previous bit cell (1 bitcell = 1 clock bit and 1 data bit). No data transition, well, you need a clock.
This effectively reduces the maximum number of transitions in a sequence from infinity with FM (a long run of '1's), down to 1. FM is described as a (0,1) RLL code -- no limit on the number of 1s in a sequence, maximum 1 zero in a sequence. MFM is (1,3) RLL -- one 1 in a sequence, 3 zeroes (can't remember off-hand what sequence triggers this).
There are more advanced RLL schemes like (1,7) and (2,7); these could be applied to floppies, but I'd be worried about the reliability of the underlying magnetic media. Remember that when RLL hard drive controllers appeared, they had to be used with an RLL-compatible hard drive which was rated for the data rate and transition rates in use.
"More power, Scotty!"
Ach, Cap'n! She cannae take it!