Mercurial clones can be cached quite easily with 'clonebundles', a Mercurial feature that allows redirecting a clone to instead download a single 'bundle' (which could come from a different server or set of servers).
What version of Mercurial were you using? Additionally, was your repository very branchy? Were your pulls stuck for a very long time on 'adding manifests'?
I helped set up such a system for a few hundred developers.
We had an 'automated Linus Torvalds', which did the merge, and aborted whenever a file was changed on both sides of the merge.
In the good case (almost every time), there were no conflicts, and the merge went fine (we had unittests, builds and regression tests as extra checks in our CI system).
In the bad case, the developer request was rejected and the developer was told to rebase or merge his code on his own, so the merge issues would be handled.
One alternative to consider is Mercurial (which command-line wise is more similar to Subversion) with subrepos (which have better usability): http://www.selenic.com/hg/help/subrepos
Some of this caveats are kinda surprising for me, coming from a Mercurial background:
* Every time you add a submodule, change its remote’s URL, or change the referenced commit for it, you demand a manual update by every collaborator. Forgetting this explicit update can result in silent regressions of the submodule’s referenced commit. -- This is something handled automatically in Mercurial. Is there any reason why the same behaviour is not used in Git?
* Commands such as status and diff display precious little info about submodules by default. -- This should be possible to implement, no? It's also something that's available in Mercurial (using the --subrepos flag), and it's a huge boost to usability.
I wish Git would have used a different name than 'branch'. It's completely at odds with branches in any other version control system and only adds confusion for people switching to/from Git.
Mercurial uses the term 'bookmarks' for Git-style branches, I feel that would have been a much better choice.
Make an appointment and try to talk to your teachers in person. Maybe they can guide you in the right direction, give you some pointers on what projects are suitable as a graduation work.
See https://wiki.mercurial-scm.org/ClonebundlesExtension