I think this can actually be possible and enjoyable. Obviously it will be a large, large game. If such a game was to be produced I would want it to play out like a Pokemon region in their main rpg games. This sounds pretty crazy but hear me out.

A Pokemon region's map is comprised of routes and towns so for this game I'm picturing a world like this as well. The route is actually a bunch of levels like the ones found in Super Mario 3D world and the towns and cities would be just as huge as the 3D Mario towns in Super Mario sunshine where you have to collect six stars in each massive world-level. Getting back to the route levels, I think they should be as many as a 2D Mario world, so maybe 5-10ish, between each town and cities. This makes the destination to each town and city more enjoyable (especially if they are impressive). Basically, this game is a mixture of 3D world and Super Mario Sunshine world levels but presented like an RPG open world. If there's a moon town, Galaxy levels would be the route level to that town.

The main part of the game would be there is no level selection screen until you actually beat the level. What I mean by that is you are basically playing all these levels in a one level like feeling or an open world environment. You are reaching route level ending flag pole after flag pole until you finally reach a city/town with no level selection screen interruption. It's one seamless gameplay feeling like traveling in the Ocean in Windwaker but with 3D World levels and 3D Mario worlds. I would like to have the graphic modeling  be simple cel-shading with good shading and lighting like the Windwaker HD so you can see possible route levels and massive towns over the horizon. This way where they won't suddenly pop up in a view as you get closer but are always there to see from any part of the game if its big enough.

The level selection screen, would now be a map of the world presented like the Pokemon maps. If you already visited a certain route and town you can move the cursor over the level and go back to it.

The problem of this game is that it might be too massive to make. If Nintendo ever decides to remake 3D world and have a new 3D Mario, they can incorporate both together to do this (but there would be a lot of minor things they do to make it like this).

I have a simple idea:
2D side-scrolling overworld
3D towns, castles, undergound, ect.

Ideas are cheap. Having one means almost nothing. You have to actually do it to prove merit.

Make a prototype. There are very powerful free tools out there for making 3D games, and you can use placeholder or ripped graphics if you can't draw.

That works well too and would probably be made because its much easier to develop. But it won't have as much open world feeling if there are breaks between  dimensional point of views.

Would you rather this be made versus a game with only 3D models (like the one I mentioned in the opening post)?

ideas are fun to imagine and talk about though. But I'm interested in these free tools you mentioned. Where can I find them?

Imagining what a game might be like is setting yourself up for disappointment. Nintendo will make the games their artists will want to make, regardless of our wants, most of the time unless it's a specific complaint about a game.

Reading someone else's game idea is like listening to someone's dream last night. Not interesting to the listener at all.

http://unity3d.com/unity/download/

You are throwing in stuff in the way of platforming. Which I don't think is a good idea.

galaxy 2 got rid of the hub world level selector for a reason.

I like your idea better for a Pikmin game. An Open World pikimin would be sick.

True. And thanks for the link! Heard of the name Unity before but I never thought it was for creating gaming prototypes.

Certain dreams are entertaining.