With 3' squares, really, how could you miss hitting someone standing in their own 3' square?
Well technically the two targets could be up to 6' away from each other if they are in the corners of their own square, and 6' is a pretty decent distance I'd say.
But regardless, to me the 3 vs 5 vs X is simply a numbers game. For example, we know that swordfighting isn't just about about standing back and swinging your weapon. It involves a lot of close quarters fighting as well as some wrestling. A swordfighter sometimes holds his blade in his own hands and slams it into the opponent.
These types of maneuvers would require that the characters get right in each other's face. Yet even though my character never leaves his square (even though by right's he should) to deliver these attacks, my verisimilitude survives....because its an abstraction.
I think the 1 yard (aka 3 feet) model numerically is superior to the 5 foot standard, and its not so different that the abstraction can't still work.