Obviously don't daisy chain, that wastes ports so badly. But if you connect 4 nodes into a loop, it goes fine. Relaying only adds 33% extra traffic. And what specifically are the latency numbers you have in mind?

If you have 3 links per box, then you can set up 8 nodes with a max distance of 2 hops and an average distance of 1.57 hops. That's not too bad. It's pretty close to having 2 links each to a big switch.