There's a penalty for fighting multiple opponents. In simultaneous rounds, this involves taking a simple -1 penalty per adversary past the first, with only the best roll actually succeeding (unless there's a large enough gap). Applied to alternating rounds, the easiest way to do it would be something along the lines of: Everyone gets an attack. You get to roll defense against everyone attacking you. However, you take a -1 penalty on all rolls (attack and defense both) per person you're fighting. You might want to use a static defense instead, and simply penalize it, as it reduces the amount of rolling. This also fits with the typical multiple action penalty.

So, as an example: Conan the barbarian is at a tavern, celebrating his latest adventure and flashing around a little more money than is wise. A gang of three street toughs decides that they want some of that cash, and accost him.
Conan: Superb Swordsman, Arming Sword (ODF 3), Shield, Mail Byrnie(DDF 3)
Street Toughs: Fair Knife, Dirk (ODF 2), thick clothing (DDF 1)

Because of the penalty, Conan counts as only a Good swordsman. The shield provides a bonus, allowing him to count as Great. Using passive defense, Conan must roll at least a -1 to hit the street toughs, and the street toughs must roll at least a +3 to hit Conan.

ROUND 1
Conan Attacks: -1 is rolled, for a Good vs. Fair. One street tough is scratched, due to the RD 1.
Scratched Tough 1 Attacks: 0, Fair is rolled. Conan darts out of the way.
Tough 2 Attacks: +1, Good vs. Great. Conan meets this with his shield.
Tough 3 Attacks: 0, Fair vs. Great. Conan pushes this aside with his sword.

ROUND 2
Conan Attacks: +1 is rolled, for a Superb vs. Fair. At RD 3, and with a bonus, one tough is Very Hurt.
Scratched Tough 1 Attacks: -1 for Mediocre is rolled. Conan steps into the cut, blocking the moving arm.
Tough 2 Attacks: +1 for Good is rolled. Conan catches this with his shield.
Very Hurt Tough 3 Runs: 0 for Poor is rolled, which is enough to escape despite wounds, as Conan is caught up fighting the other two.

ROUND 3
Conan is now only fighting two people. He is effectively back up to Superb.
Conan Attacks: +3 for Legendary +2 is rolled, vs. Fair. This is an incapacitating blow - Conan moves in close, throws the tough to the ground with his shield, then stabs him through the back.
Scratched Tough Runs: However, this is now contested, as Conan could chase after him. This would involve a multiple action penalty for Conan, which connects nicely to the previous outnumbered penalty. This is also better handled as an opposed roll, and requires some new stats.

Conan: Great Athletics. Effectively Good, due to the armor and shield. -1 rolled, for Mediocre with penalty.
Tough: Fair athletics. +3 rolled, for Superb. The thug escapes. Conan shrugs, and goes back to cavorting, leaving the wounded tough to be hauled out.
END EXAMPLE

As for multiple defenses - I actually do armed sparring with medieval weapons (not live steel, obviously). It is entirely common for me to be making the equivalent of multiple defenses in one "combat round", here defined as a second or so. Someone might lob a javelin at me, which I either dodge or push out of the way. Someone else might thrust with a spear, which I generally knock sideways. Yet another person might move in with a sword, which I might block by deliberately pushing their shield (I generally use a spear). An active defense against multiple attacks is very much possible, and it's not even that bad under most circumstances - it's harder than just one attack, and if they are coming from multiple directions it gets worse (though with a weapon and shield this isn't too bad). There also very much is a penalty on attacking if fighting multiple people - the big thing being that I simply can't take many opportunities. Sure, I could stab at that person's chest, but if I do so I just know that there's a throwing knife coming my way, and my spear will be out of position to block - plus, I'll be in a weird pose to dodge, and am a little too slow to dodge close up throwing daggers most of the time anyways (whereas I can generally block them). In essence, I just missed all defenses. It's also worth noting that the penalty would still allow attacks on weaker defenses, which is also pretty accurate - someone up nice and close (but not too close) and in a bad position can generally be hit with one quick motion, leaving enough time to knock the inevitable knife out of the air, or dodge it due to being in a better position to do so. Fudge passes the realism test with flying colors here.