Re: Hiruzen, Third should take command.
He's hardly in a position to lead the Shinobi Alliance - he's seen as one of the greatest enemies to Suna, Kiri, Iwa and Kumo during his lifetime. How many of these nations has he fought against? Got to war against? Devastated in battle - killed how many?
I doubt they've forgotten him - his age, power, being known as a 'God' of Shinobi - we see him in Naruto as the grandfather figure, he's a bit of a Dumbledore. Old geezer, seems harmless but when angry he's be bloody terrifying. I imagine many lived in fear of him - fear breeds distrust, hatred etc.
Don't get me started on Danzo - he undoubtedly tainted Sarutobi's reputation, doing what he did in the name of Konoha during the Sandaime's rule.
He hasn't proven himself them (like Gaara did with his speech), their Kages haven't acknowledged him, the Alliance itself he has no part of.
... it's his student, Orochimaru, who is responsible for the 'perfection' of the Edo Tensei used - the same shinobi known for his vile experiments and a known enemy to them all. The same one who still holds control over him.
So no, not fit to lead.