I'll try to take a look at some of this this weekend, but I don't have two WUPCs, so this bit: can't really be looked at by me.
Also, one minor thing, if you're basing this player "taking over another" experience on the LEDs on the Wii remote(s) and the WUPC(s), ignore them. libwupc keeps track of WUPCs separately from wiiuse, meaning that in theory up to 8 controllers total can be connected to a homebrew program. If it's based on playing an actual game where the controllers "hijack" each others' physical controls, forget I mentioned it.
When Classic controller for player 1 is active, WUP hijacks that signal instead of initializing as player 2, and vice versa. Since there are no player 3 and 4 slots, I think it would work best if there were either a WUP option in controller settings, or when one CC/P or WUP is already active then the next controller becomes player 2.