I like to improve Ubuntu experience in a container but is it feasible to replace the current Systemd with S6? I prefer not to use Alpine where performance matter.
Or any alternative where I could still get security update from Ubuntu?
I think it would be easier for you to build over a distribution that does not use systemd, instead of creating an ad-hoc distribution.
My suggestion is to look into Devuan. Look into the distrobuilder tool and create a configuration file to use that distro.
A quick alternative would be to use an old Ubuntu image, like ubuntu:12.04. I think though it would be better to make an attempt with Devuan.