For one, the NVA is too important to just be a branch of the Soviets.
Secondly the NVA was known for having the best trained troops in the Warsaw Pact and even in all of Europe so one way is to have all of the NVA troops start with more veterancy than the soviets for example. And yes militia units can and probably will be implemented. There is of course plenty of room for suggestions :)

I do have a few ideas on the Militia formations. The main purpose of them was to make life miserable for enemy paratroopers while the important formations are busy at the frontline. The calculus was that if every factory has a few militiamen attached to the workplace it allows for organised and calm evacuations while the "Combat Groups of the Working Class" keeps the threat busy until the Volkspolizei's equivalent of a SWAT Team or other rapid-response forces can lay siege to the Paratroopers positions.

It may be legitimate to include the People's Police as a cheap light motorised force that can rapidly maneuver a few reasonably well trained guys with onto the battlefield via Police car as a cheap rush option. This would be very fun to do in early game dynamic conquests because if they survive it means a two-man team with a Police Trabant can be upgeared with scavanged weapons.

Another rearline unit that would be fun is the Guard Regiment Dzherzhinsky of the Ministry for State Security. They were an almost brigade sized unit that served as sentries for guarding important state infrastructure and were intended to be deployed for urban combat in the capture of West Berlin in case of war. The way they could be differentiated from regular army troops is by wider proliferation of flamethrowers, snipers and thermobaric weapons in their arsenal. Also, because they are one of those very ceremonial units who pose in front of the important government buildings in peacetime it may be fun to depict them as going to battle in the fancy parade uniforms with some tactical gear thrown over it.

The Combat Groups of the Working Class were historically armed with whatever equipment was too ancient for the NVA, which would mean scraped together World War 2 era weaponry from soviet stocks and supporting T34s during this mod's timeframe. But something I personally think would be fun is to assume that they'd still have the odd remnants of german WW2 era equipment around. It would be fun to have one dedicated type of KdA Squad that is armed with some unholy amalgamation of late war Wehrmacht weaponry and orders to make themselves useful by using up the old bullets.
In general I think the most sensible way to model this type of squad is as being mostly inexperienced, but with one to three soldiers in each squad at the skill level of the regular NVA Infantry to represent the experienced leadership cadres.

If some creative liberties are allowed with imagining what kinds of ad-hoc formation East Germany would have raised in a serious war, I'd have one more suggestion.
The Officer School "Otto Winzer" on Rügen was always hosting foreign military cadres to be trained and if World War 3 is happening it can be assumed they are stuck in East Germany. From this you could potentially elaborate a small tech tree that unlocks different units of foreign officer cadets from Southern Africa, Syria, Ethiopia, Afghanistan, Vietnam and Nicaragua with two germans mixed into each squad. Logically they would be armed and equipped with NVA gear, but it would make for more fun gameplay if they have some foreign weapons yoinked from the academy's stocks. Out of these hypothetical units the nicaraguan section could be treated as being of exceptional veterancy due to previous personal combat experience and special training by the NVA's Paratrooper Regiment. This might be a bit of a weird inclusion, but I think it would add some aesthetic variation.

For the militia it can be done similar for how the PRC militia are done, or we can incorporate some policemen who have been NVA veterans to lead the militia. The Combat Groups of the Working Class can also be incorporated as a type of ,if not, the militia for the NVA since they are a hodgepodge of whatever equipment they have in stock. For using only the police it's a bit of a tossup since they are still police. One way it can be done is if "Grenzers" were used in that role with BTR-40's or even the Trabant Kübel that has a soft top.

Yes, the Wachregiment AKA Wachregiment "Feliks E. Dzierzynski are almost certainly to be in as while they are under the StaSi they were elite motorized rifle regiment. At the time of the mod they had around 7K personnel and had the same equipment as the NVA motorized rifle regiment equivalent.

As for the Officer School "Otto Winzer" foreign military cadres they won't be added with 90% certainty.

>The DDR's equipment tended to get favourable treatment by soviets weapons exports and get newer stuff before the other Warsaw Pact member states

That is a common trope, but is not really true if one actually looks at their OOBs.
The NVA mostly got the same equipment as the Poles and Czechs, sometimes better, sometimes worse.
For example all of those three got the T-72, the BMP-2, the MiG-29, Mi-24 etc. in similar percentages and in the same timeframe.
The Czechoslovaks even had the Su-25.

By the way, the MSR-28 was not trained for amphibious landings before the early 1980.
The MSR-29 that was stationed on Rügen had this role during that timeframe.