Are you blind or did you not notice Nintendo sell the 3DS as a core gamer device for the first few years or so? Not to mention theres been no Touch Generations releases. Btw, understanding when the Wii U was conceived originally has nothing to do with the 5 years gap when designs are re-engineered constantly.

In addition, it is clealy evident that Nintendo KNEW exactly what the iOS market was doing, and that's why they launched the Wii U with a minigame compilation (with rather admittedly, some very boring motion/swipe controlled games with Nintendo branding on them). As much as the home console market commands byline coverage in western game media, i think ignoring Nintendo and its relationships with indys (both on the 3DS and Wii U),  in this generation & next will be detrimental to the old dogs (EA, Ubisoft) of gaming.

3DS launched with Nintendogs + cats as the lead software title from Nintendo, lol. They may not have the "Touch Generations" label, but Brain Training, Art Academy, Style Savvy, and Animal Crossing are all available on the 3DS. 

The audience just isn't. 

Indies are nice, but those devs have no loyalty (and can't afford to be choosy quite frankly), no one cares that Wii U has indie games if they're the same game that's on 10 other platforms. That's the problem with indie games. That and often those same games are available for cheaper on the iPad/Google Play store, etc. 

Or frankly do nothing and just wait for MS to realize people switched to PS4's already. If Wii U keeps up with XBOne, third parties have way more incentive.

What makes you think having the same indy games as other platforms isn't being competitive though? Saying it needs 3rd Parties, is the equivalent of saying Playstation and MS need a Mario Killer.

Personally i think Nintendo has more capability/expertise in development assistance (funding, skillset, marketing), and you're not giving them enough credit.

XB1 will get games because it's close enough to PS4 to keep getting ports of major 3rd party games.

Wii U is close to PS360, so if it turned around it might get PS360 ports, but devs will cut down on PS360 games by 2015.

There were lots of reasons for the poor DS start (relative to later years).  It was an odd console, and PSP seemed like the item to have.  The Playstation brand, the sleeker look, greater processing power.  DS was clunky and weird with 2 screens.  But then Nintendo gave it a redesign to look much more trendy, released NSMB - the first 2D Mario in years - and unique new IPs such as Nintendogs and Brain Age that roped in casual gamers like never before.  These moves combined were amazing, and are what Wii U needs.

You shouldn't need to do a redesign to add more storage space.  Also, it would be cheaper to buy your own storage space such as a 1/2 TB external for under $100.  There is no way in hell you can match that price in SSD format which the Wii U uses for storage space.  A Wii U with larger SSD would drive the cost up too much.  There is no reason for a redesign in my opinion.  This will probably be the last holiday season of the Wii so the whole Wii / Wii U confusion should die with the Wii.

Nintendo is offering games now with the hardware.  The Wii U is now profitable.  The Wii don't need a price cut, it needs games.  There are enough Mario games that's out now.  True it needs that Zelda, Bayonetta 2, Super Smash Bros, Hyrule Warriors ......

I don't think more storage is necessary. But a redesign of the look of the console to make it different than Wii and a new smaller, sleeker, more ergonomic Gamepad could be a very good decision. It also gives Wii U a fresh start and removes some of the negative stigma that has stuck to it since before launch. Redesign it, launch at $250 for the fall with a great new IP and all the great games that will be available by then and market it. It could sell well.

Yes, they do.  Also, Mistwalker doesn't want to work the Sony and MS has little presence in Japan, so Nintendo-Mistwalker is a good fit.