Wii U can't be expanded, it's only external ports are USB 2.0 and that's far too slow for any meaningful hardware upgrade.

a service

X in Japan is read as "cross", so I'm guessing it's the Nintendo Cross, which will be the fusion of their handheld and console hardware into one. Either that or, as others have said, it could be a unified account system covering/(crossing) mobile, 3DS, Wii U, and a new handheld or home console.

It is Nintendo's unified operating system. A handheld form-factor will release late 2016 and a console form-factor early-mid 2017.

Will be the Nintendo Fusion.

N = Nintendo
X = Fusion

duh

I'm expecting Nintendo's own high powered Steam Machine, except backwards compatible with every game ever made. It doesn't need cables, it runs on the tears of fanboys. It doesn't need marketing, people just sense it's existence and immediately want it. It also comes bundled with your own personalized love pillow, with Peach, Daisy, Zelda, Samus, and Isabelle from Animal Crossing as optional designs.

I mean, they wouldn't catagorize it as something separate from the Wii U if it was an expansion pack.

Also, that's not exactly something you can just add on, is it?

It's a handheld, 3DS sucessor for 2016/17.

X = Fusion? That's a bit of a stretch. It actually means:

N = Nintendo

X = Handheld