Little Truths, a well made fan supplement, has a slightly less debilitating version of the Blind Disadvantage (p.20) giving you significantly more ATN, better movement and you only run the risk of falling prone in unfamiliar surroundings. It also contains stats for the shikomizue (cane sword, p.24), the Acute Sense Advantage (p.19) and the Blind Warrior Path (IR2, p.29).
Generic Ronin (Secrets p.236) Many techniques in this school don't fit Zatoichi's archetype but you can swap them for more appropriate ronin Paths. Rank 2 might save you in a tough spot as your base ATN is so low and Zatoichi gets into a lot of fights with multiple enemies. Rank 4 will give you SAA with a shikomizue (cane sword, Little Truths p.24) and the ability to spend a VP to raise it's damage, essential for getting the one hit kills he's known for.
Kenku have been known to train worthy individuals in their Kenku Swordsman (Enemies p.180) school. This better embodies the master swordsman trope than Generic Ronin and most of the ronin Paths and Advanced Schools. It also rewards patiently waiting for your enemies to come to you and mitigates some of the penalties for blindness. Unfortunately your blindness makes it so you will be unable to employ the rank 5 technique.
Forest Killer (IR1, Core p.234) a good replacement for Generic Ronin 1. Would give you a bit extra damage to pull off Zatoichi's signature one hit kills and a bit more durability.
Moonlight Rider (IR2, Enemies p.201) has a technique for fighting in the dark that, depending on your GM's interpretation, might entirely eliminate your penalties for blindness. Either way, it would give you an edge when you cut down all the candles and lanterns and make your enemies fight you blind.
Blind Warrior (IR2, Little Truths p.29) Probably your best bet to pull off the build, could replace Kenku Swordsman rank 2. It should be noted that it is intended to work with it's own, weaker version of Eight Directions Awareness found later in the book (p. 34).
There are other paths that might be appropriate but I'm not entirely familiar with Zatoichi. Check out the summaries of the various ronin paths here, there are a few for defending others or ones that give bonuses for having high honour that might apply. I haven't seen an instance of Zatoichi performing an Iaijutsu duel but there are some options there as well. It seems he has a few ranks in the skill for the mastery ability to draw his sword instantly.
- penalty to attack rolls: There are innumerable ways to add bonuses to attack rolls beyond just raising your skill and agility; advantages, emphases, paths, take your pick.
- ATN penalty: Most defensive options like kata are out of your reach as a ronin. A high Void ring will be essential to raise your ATN for a round and to reduce incoming wounds. You are going to get hit, so Strength of the Earth will reduce Wound penalties a little. Another option would be to take Friend of the Brotherhood and go for defensive Kiho.
- Movement penalties: a Athletics/Agility of 7k3 will be enough to pass the TN20 test ~90% of the time. The kata Striking as Water will give you back some of the mobility you lose.
- perception penalties: the Eight Direction Awareness Kiho (Core p.266) is all I can think of to mitigate actual blindness. Otherwise Investigation emphases towards hearing and the Acute Sense Advantage (Little Truths p.19) might be your only options.
get on-par with more widely skilled samurai of roughly equal School Rank
This is very ambiguous. Insight and School rank are not necessarily a good indication of combat prowess, it's not even a good indication of how much XP the samurai has spent. A courtier can spend hundreds of XP on combat related abilities and still be IR1 and crush an IR5 bushi who took Way of the Daimyo and focused on effectively running their Gentry.
Against weaker opponents I think you should be fine, the bigger problem is the multi man melees Zatoich stumbles into and one-on-one fights against skilled combatants. By definition, a character with Blind is going to be at a disadvantage against anyone with equal skill in combat. As Ben Barden said, Zatoichi is able to win because he is just plain better than most of the people he fights.
- Against a large group of people your ATN penalty is your biggest weakness. There is really no way to replicate effortlessly dispatching dozens of people with an ATN of ~15. even a single mook with only 3k2 to attack has a high probability of hitting you, then wound penalties will start to add up. Zatoichi seems to deal with this mostly by killing his opponents in one strike so they cannot attack him in the first place, get strength as high as possible and go for the Kenjutsu mastery abilities to increase sword damage. Simple Action Attacks will also be essential so you can take down as many people per round as possible.
- Against a single skilled opponent your best bet is to make sure you go first (IE have high reflexes for better initiative rolls) and hit him hard enough that the wound penalties even the playing field. A +5 penalty is roughly equivalent to the -1k1 you take to your attack rolls but your extremely low ATN makes it essential to go for you to aim higher, a successful feint maneuver would be devastating. Spend void points on damage and using the Centre Stance bonus on damage would be useful but much harder to pull off without significant risk.