1. Determine minimum human reaction times and limit movement to within those parameters on the client side. (For example a human can't swing their view around [in a fps] in a microsecond so make that impossible on the client) this will require a lot of user testing to get right, get pro players and push their limits.
2. Build a 'unified field theory' for your game world that is aware of the client side constraints as well as limits on character movement, reload times, bullet velocities, etc. Run this [much smaller than the real game] simulation on server.
3. Ban any user who sends input that violates physics.
Now cheating has to at look like high level play instead of someone flying around spinbotting everyone from across the map. Players hopefully don't get as frustrated when playing against cheaters as they assume they are just great players. Great players should be competitive against cheaters as well.
There's also the multi-world randomiser community, where people network a bunch of emulators together, and finding an item in one game can actually unlock something else in another player's game.
You just described most competitive games (even vaguely so), and 100% of esports.