I want to write an algo that scales the textures according
to the individual scaling of the objects in the WE.

Problem is that "mesh" in mesh->texScale(xyz) is a pointer,
which obviously changes all instances of the original mesh in the WE to
the same base value.

So how do I deal with texture stretching on individually scaled objects and
size variation in instances?

Is it really necessary to duplicate all meshes that are scaled in any other way than
1/1/1 if we need to keep the texturing consistent? Or is there another solution?

You'd either have to make multiple copies of Mesh in the game, or write shader that adjusts the UVs in the vertex shader to your liking.

Yeah, I figured. I took a look at other "places" and it is mostly the same thing there.
Usually, where it is possible on a per-mesh basis it is indeed shader-based.
Some do it per-material based.

With Esenthel we're talking HLSL shaders, right?
And as far as I remember from reading here, shaders need to be compiled
into the engine, correct?

Yes, that has to be done by modifying the engine source.