I agree, although I do think there's scope for fines too (but not exclusively) - ultimately a fine may require the sale of players to cover it but if they've acquired these players by going over the limit that's not an unreasonable thing to expect.It should just be a transfer ban, length should be subject to the degree of the breach.
Financial penalties don't make sense (clubs in actual financial peril won't be able to afford it, larger clubs/owners will treat it as a tax).
Points deductions involve the interests of too many clubs.
For me if you wanted a sanctions framework that could be applied consistently and rigidly it could be a combination of the two, something like:
An automatic one window transfer embargo for going over (scaling up to 2, 3 windows etc for subsequent offences within a set period to punish repeat offenders) PLUS a fine equal to the amount over the limit you are, so that every penny spent over the limit effectively costs you double.
That would sufficiently take into account the offence, the scale of the offence, and the number of offences over time while still being harsh enough to act as a deterrent. Points should be nowhere near it.