To me, this basically confirms Kingdom Hearts 3 for Wii.
Regarding swinging the Wii-mote for attacking, I think they should definitely do it, but not have pre-done animations for the swings. Get it to dynamically generate the animation based on the subtleties of your swings, and it'll be great. Also, to do spells, press a button and move the Wii-Mote the way Sora (or whoever you are) would do it. For example, thrust forward for a Fire spell, or point upward for Cure. It could feel great, imo