I always thought the player was the national spirit, or something along those lines. That's one of the reasons why I never understood the objections to the level of direct control the player has in vanilla Vicky 1. If the player builds a factory, could that not represent capitalists reacting to demand just as easily as it might represent the state building it?
As for the point that direct control over pops means that someone turns up at a field, rounds up a bunch of peasants and informs them they're now soldiers, that doesn't seem particularly far-fetched to me, but if it is, couldn't the conversion of the pop just represent the decisions of the individual peasants to join the army instead?