Was the model assembled incorrectly in real life? I mean I totally agree that a blue impulse engine makes no sense and they must have rushed the lighting system for the episode and fixed it later. I always prefer real life explanation whenever possible since there are usually practical reasons why these things happened.
I agree it would have been nice to have seen the Ambassador model in more episodes and I understand the thing broke in some sort of earthquake and they stopped using it during the switchover to CGI. Since the Exeter and Valdemar were both present in Cardassian space during the war (I'm making an assumption with the latter), there were at least a few involved with the Dominion war if not seen onscreen.