Third parties are simply a no go for Nintendo, Nintendo needs to accept that cold, bitter, hard truth of that, the Rayman situation was just the final piece of icing on a crap cake.

With two other hardware manufacturers that tailor their platforms specifically around third parties (Sony and MS), Nintendo will never be able to compete on those terms especially now that they've bowed out of competing on tech specs.

Western third parties want no part of that and what's left of the Japanese dev community barely makes any big console games anymore (Final Fantasy, Resident Evil, MGS and .... ?).

While you're right, Nintendo just did a restructuring which will allow them to support both platforms by asking their internal devs to work on both the 3DS and the WiiU simultaneously.

They also mentioned that they want to have their next home console and handheld to be more similar in terms of architecture and power so that they can use assets for both systems.

So they're trying their best and it'll take a while before results of these actions actually start to have an affect.

Don't forget their also outsourcing a lot of their games including: Star Fox 64 3D, LoZ3D, Fire Emblem x Shin Megami, etc...

That is the key.  That, and bringing out three or four big first-party IP each year.  Good news is, Nintendo has become extremely indie-friendly with the Wii U and 3DS eShop, and in fact, I've read multiple times in developer interviews from Nintendo-approved indies that it's far easier to be approved and develop for Wii U or 3DS eShop than it is for XBL, or even PSN.  Nintendo gives indies a larger cut, they no longer make you pass a certain sales threshold before you get paid for your game, you can manage your own game sales and discounts, and can send out patches without having to jump through tons of hoops and spend a lot of money.

Correct me if I'm wrong, but I thought that restructuring applied only to the hardware engineering teams.  I don't recall anything about software development being affected?  Did I miss something when they announced that back in January?

Nintendo struggles supporting two platforms when they can't trust on third party support.

Where are the indie games though? There's like 3 (lol) on the Wii U and not much announced for the future at all either. If I was an indie publisher honestly I'd pick XBL or PSN over Wii U too because they have far, far larger userbases even if MS/Sony take a bigger cut.

It's like would you rather have a shop in a mall that has 100x more shoppers but has a slightly higher rent or the mall that has almost no one there but slightly lower rent.

Well yeah, you're talking about two platforms that have been out seven to eight years longer than the Wii U, so of course in reference to the install base there is simply no comparison.  But nevertheless, Nintendo has built a very indie-friendly environment for their digital shops on both Wii U and 3DS and it's only a matter of time before they attract even more support.  Wii U has admittedly had a slow start, but there have been some notable Wii U indie titles that are not available on PSN or XBL, the reason being Nintendo made the effort of offering a more developer-friendly environment.

Seriously though, why have they not invested in more 2nd and 1st party studios or expanded their current ones?

From what I know only Retro and Monolith are actively expanding and recruiting more people. Why hasn't EAD done this?

I read something Miyamoto once said, and it were along the lines that they wish they could expand more rapidly, but they want to be sure that they maintain the quality of both their workers and their games.

I'm gonna be honest here. I would be fine with Nintendo just having a handheld device and all games coming out on it.
With that said, im suspect as i have a 3DS and dont have a Wii U yet.

They would have to make a pretty powerful handheld though.