I love the idea and many of the suggestions you have made. Personally, I would go more high-end. The idea that Nintendo can't sell at a high price is a myth. Wii could have sold at $400 a system at launch. The product just needs to be desirable.
I think a Nablet should sit at the top of the the Nintendo hierarchy at launch. It should look modern and high-end. I really like the idea of building it from the corpse of the Wii U, using much of the resources which should be able to be made portable in 2 years. It should be the size of an iPad mini and be essentially a true tablet with subtle circle pads, buttons and cross pads at each end. The screen should be of high quality.
With similar power and architecture, porting Wii U games should be quick and easy. The Nablet should launch with many Wii U titles available on eShop and some key games like Mario3DWorld and MarioKart 8 available at retail on flash cards. This worked great for past handleds, like the DS with Mario64. A few new, unique, non-Nintendo mascot games should also be out to push the system.
Market it as a high-end gaming product for adults who need a tablet. It should have it's own branding not unlike Wii at launch that makes it feel OK for adults to pick up (again like Wii at launch). The Wii Sports and Nintendoland team should be tasked with making lots of fun casual apps to play. If adults take to it, kids will follow. If it looks and works as nicely as an iPad, but also has cool games, kids will be wanting one in a hurry and it will quickly seem like a superior product because of the superior software. This will allow premium pricing, like Apple.
I would target a $299 price with a $399 XL model a possibility. A subscription service would be offered that allowed free downloads of classic titles remastered with modern graphics (quick-play titles like Donkey Kong in HD), online matchmaking and other cool apps for about $29/year. Wii U games would be available in the eshop for full price.
Nintendo's next home console would follow this branding and launch a year or two later and also follow the grown-up Nintendo theme to try and lure back those who grew up with Nintendo (like the Wii did). The Nablet could work as a controller or second screen for this new system like the Wii U pad does now. The subscription service would carry over to the new console, as would many games and apps. I would not target TV out with the Nablet, but rather connectivity with the new console to encourage consumers to become networked Nintendo homes with multiple products.
