All of which was the result of being in touch with their target audience.

Unfortunately that's a fleeting audience. 

Nintendo will never willingly go the route of $1 phone/tablet games which is what that crowd now wants, so being "in touch" with casuals today is even more far gone from Nintendo's prinicipals than what the hardcore gamer wants. 

It wasn't just casuals. Casuals didn't buy 7 million plus copies of Twilight Princess. Nintendo only really lost the plot in 2011.

Yep, I agree with you. Now, the casuals have many options for their gaming needs when compared 6 years ago. Sony and Microsoft are in safe zone beacuse of their games are meant for hardcore which is only possible from big studios that they have to developer them.

But, casuals games can be developed by Independent small studios.

Lots of hardcore gamers bought the Wii as a secondary console too ... it was a fun/hot thing to have in 2006-2009 for the girlfriend, party, Thanksgiving with family, when Uncle Teddy who loves Wii bowling is over, etc. etc. etc. 

Though there's still an audience for Zelda anyway, though Nintendo may not want to accept it, to get that type of number again (or close), people will likely want a darker Zelda. Twilight Princess brought that and was successful like Ocarina of Time. 

Nintendo seems to be hellbent on making the franchise cartoony though (in various different forms) even though they have like 10 other franchises that already fill that void. 

Preaching to the choir man, I've been arguing since the 2011 tech demo that Nintendo needs to make Zelda Wii U dark, in the vein of Twilight Princess.

Showing Cranky wasn`t a bad decision. It just became less meaningful because of the leak.
Only a few companies announced something new. The big comanies showed more of the same too.

Would be great if they showed more of X, but DK is coming and they want to show it off more.

Even darker I think. Honestly even a "dark" Zelda isn't much darker if at all than a typical Harry Potter movie, Nintendo has some warped notion that "family entertainment" can only mean 1950s-era Walt Disney levels of "dark" (even Disney has outgrown this thinking). But the Wii had a 100 million userbase too ... proportionately a lot of franchises simply were going to get a bump, I think TP benefited a lot from the early overwhelming enthusiasm for the Wii as a whole. 

Super Mario 3D World probably would've sold 20+ million copies on the Wii circa 2007 or 2008. On Wii U getting to 5 million LTD might be a struggle. 

Bayonetta 2 (with the announcement of an enhanced port of the first game coming to the system so that those like me that missed it the first time would have had even more incentive to pick up the game ) with heavy emphasis on Bayonetta's assets to show that Nintendo has an interest in and aren't ashamed to bring more adult themed games than their usual fair to the console ( especially in the face of all these commercials that they've released recently which basically stamp Wii U as the Safe, Kiddy console of Choice for yet another generation ).

Who are they trying to appeal to with Cranky Kong? The Senior Citizens that enjoyed Wii Bowling?

Maybe they do want to be the Senior Citizen and Elementary through Middle School Student's Console of Choice.

Even though 8th Graders probably want the more mature games too and that was really my issue with Nintendo when I was in the 8th Grade and NES first came out. It took Excitebike, Kung Fu, Pro Wrestling, Tyson's Punch Out, Dragon Warrior, and Zelda to actually make me enjoy the console.

I definitely wasn't a big Mario kid though I did love Donkey Kong and Donkey Kong Jr. when they first came out but Super Mario Brothers seemed even less mature to me in 8th Grade than Donkey Kong, Smurfs, Donkey Kong Jr. ( Mario turns out to be Evil ), Venture, and War Games in the Arcades and on Colecovision and the Pitfall ( and other Activision, Atari, and Imagic and other ) Games on the Atari VCS / 2600 did when I was in the 3rd Grade ( and before ).

Any way, that wasn't in my estimation the proper thing to show at VGX to make the adult / core gamers come back ( Neither would have been Smash Brothers and probably not even Zelda ).

A statement that Tomb Raider the Definitive Version and Bayonetta's ass, especially the way she looked in the first game with her long hair, with the announcement that the Definitive Version of the original Bayonetta was also on the way to Wii U this Spring, would have been steps in the right direction in my honest opinion.

Edit:  News that they were getting "The Witcher 3" and that it would look exacrly like the PS4 and XBL Versions would have been excellent imho as well.

They should have done that Zelda game announced by now and make it ready for 2014 to get some momentum but they failed and still promoting casual games which interests only old Nintendo fans.