They aren't true floating rotors. They're 2 piece rotors. It does help with heat management to an extent as well. You are right, the carrier is very wide, and sometimes the rivets rub up against the adapter or caliper.
There are titanium and aluminum rotors, but Ti and Al have lower friction coefficients. And you can only use certain pad compounds. Stans makes a coated aluminum rotor, but the coating wears off rather quickly if you ride in mud. I don't think Magnesium would be a very good material...
Stainless is indeed the best option. There are some designs that are plenty light. Check out the Save Some Weight forum.