I would 1000% support something like this in a future HF. It was briefly discussed in a comment thread on @blocktrades post about second layer applications on Hive (https://peakd.com/hive/@blocktrades/hive-s-future-as-a-2nd-layer-blockchain-network#@blocktrades/qd642s) as being a "holy grail" for blockchains, which I agree with.
The key is how it can be implemented though. I'm not entirely sure how you see this working:
they will also process the pending atomic token swaps by first verifying balances on the Ethereum based smart contract that holds the wrapped Hive tokens
I think it would have to be done by submitting a proof that the transaction took place on Ethereum which the Hive node can validate, or potentially having some time-lock mechanism like what is used for BTC atomic swaps. I don't know the details about how these work, but they have been done for other chains so hopefully we can borrow what they have done.
Either way I would definitely support putting funds towards researching and implementing a solution for this. I would think that if it's implemented for HIVE it should be able to be used for SMTs too which would be a big added benefit for projects to create their own tokens here one day.
Yeah implementation details would have to be figured out but as you said other chains have swaps with timelocks and different ideas we can possibly adapt.
I suggest to look at blocknet and use their api for cross blockchain trust and trx. I found this is the only cross-blockchain solution that is working. Others are still in development.