In what sort of fairy tale land do these HD proponents live? You want to kill the AM band? Just go digital and obsolete hundreds of millions of radios. People don't care enough about AM to replace those radios just to receive it.
The narrowband FM modulation scheme is interesting. For at least 20 years, wireless keyboards and mice have used it with +/-6 kHz 455 kHz ceramic filters, running at (formerly) CB frequencies because the glut of excess crystals were cheap once CB died. No reason the same architecture wouldn't work at AM frequencies, but I am concerned about bandwidth. Assuming enough bandwidth for FM modulation to work, a hybrid system of AM and FM modulation could maybe be worked out to allow existing AM radios to work while narrowband FM receivers slowly emerged in the marketplace.
I guess you were out of the country when many millions of NTSC televisions became obsolete. As to licensing, how many are old enough to remember when stations had to pay Armstrong a licensing fee to produce and broadcast using FM. This is nothing new.