There are several factors, yes. They wont make their next console read BR discs for example. That would mean paying licence fees and if its one thing Nintendo hates, its just that...

Well If they continue making a profit, I don't see the point in wasting hundreds of millions to make a new console that will have a short life span. Lets pretend they release a new "power" console in 2017. If the PS5 comes out in 2019 with much better power, the 2017 console's lifespan is pretty much over by 2020. They could just keep working on their growing profits and release a new console at the same time as everyone else, instead of making another Dreamcast.

Besides, with the remake culture we have these days, development for the Wii U is like pocketing gold for later. Next, Next Gen level Zelda U, Metroid Prime U, Mario U, all easily updated for launch supplementation.

Making smaller profits over a longer period of time while setting up the ground work fpr a successful release just seems like a smarter decision than sending your next console out to slaughter. With the Wii U trending upwards as it is now, a LOT of important titles to be made still, and an eventual pricecut, and/or a new/larger model the Wii U's profitability can only go up, especially when PS4 and XB1 hit a point of saturation where more people are looking for console #2 than console #1.

Yes. They wont pay for exclusive content either. They might let third party developers use costumes from many of their franchises, but they wont pay for anything...

In theory it sounds pretty nice, but it will not work.
- The 3rds for sure still would not support the next nintendo console evenly as the other consoles, even if it has the same architecture and same specs as PS5/XBtwo.
- The people still would not buy the 3rds games on a nintendo console even if it really would receive the best version (some advantage like PS4 -vs- XBone in this gen ... even though i think the difference is at some parts really non-existent and not even remotely worth mentioning)

But yes, I agree - it would be stupid to release some midgen-console e.g. in holiday season 2016.
The 3rds would have no interest in really developing for it because PS4+XBone will then together have an hardware base of something like 80Mio.
The PS5+XBtwo, released e.g. holiday season 2018 will have so much stronger hardware that the 3rds will still have no interest in developing for it.

The people will not all of a sudden buy the multigames (if they are being developed at all for a userbase of 0) on WiiU2 from 2016 onwards, because they maybe are a bit better than PS4/XBone version. They would just wait for PS5/XBtwo to release because they want a real generation leap, not only a half leap. If the difference then really is big from WiiU2 to PS5/XBtwo will not be important - people will tell themselves that it is big and that they need PS5/XBtwo and NOT WiiU2.

Sounds pretty much like "Nintendo is doomed V9000" and i really do NOT like it, as I am a nintendo fan since >20 years, but when trying to compete directly against MS and Sony, Nintendo will lose badly - see Gamecube.
The only advantage for WiiU2 compared to Gamecube is - in the meantime multiplat games are much more common.
I know at the moment its even worse than Gamecube, but i think WiiU will have sold better at the end of its life.

Nintendo needs their own market and needs to deliver games to the mass market which they want to play at "all" costs. If they could e.g. manage to completely get all JRPG stuff exclusively for their console, this would sell lots of consoles.

As per Nintendo's next home platform having a "short life" that's arguable ... 

I don't even see the PS5/Xbox 4 coming out until 2022 so Nintendo releasing a new console in 2017 or even 2016 doesn't seem like a bad idea when it gives them another chance to catch up with the competitors in terms of hardware capabilities to give more incentives for 3rd party developers to release their games on that platform and another chance to garner a better image with some important characteristics of differentiation in comparison to the current HD twins ... 

Sure the WII U maybe profitable but I think the best course of action for Nintendo is releasing a new console instead supporting an old one that's plateauing ...

The next Nintendo system SHOULD release earlier. Look at the WiiU, it managed to sell something during the year of advantage (and it would have sold more if it wasn't for those pesky 3rd parties and that mangy drought). It sold poorly, but imagine it having to compete with the release of PS4, it would have crashed and burned.

There are a number of things you said in your OP that leads me to believe you aren't entirely sure of what you are talking about especially in relation to how the industry works. To keep things simple though, I would just answer your core topic and ignore all the side stuff.

Releasing a year or even two years early is always better than releasing at the same time or a year late f and only if, you do it right. The three main problems with nintendo is that they have an underpowered console, a nonexistent online presence and near zero third party support. Its not complicated or magic, nintendo needs to tackle those three areas then couple it all with aggressive marketing and support lobbying to become as successful as either sony or MS.

Problem with nintendo is that they appear to be living in some sort of bubble where they seem to think that these things don't matter. Somehow, they do stupid things like make an SD console when everyone is pushing for a HD console, or make a sub HD console when everyone is trying to hit 1080p full HD. If they make a 1080p full Hd console when everyone is trying to make a 4k console, then they are making the exact same mistake again.

And as for third parties, I cannot stress this enough. Nintendo isn't doing themselves any favors. Its the chicken and the egg scenario. Nintendo has to spend a lot of money to lobby third parties to support their console and ensure sales of third party games on their console and the more that happens the more third parties start naturally trying to support their platform. No platform will survive on first party alone.

Yeah, I think the best thing for them to do is continue to make cheap hardware and great games. Appeal to the fans and keep making a profit.

I read a lot of people say stuff like this. People will not buy third party games even if they have a nintendo console. I think this is just not true. The problem is that nintenod consoles usually have the worst versions of those third party games. So whtat you find are that the people that even buy nintendo consoles are not interested in buying third party games cause thats not why they bought the console to begin with. Lets take the wiiU and say a PS4 for instance. If I look at the release year of both platforms, I will only buy a wiiU if i want nintendo exclusives. But if in addition to the sony exclusives I happen to want 3 third party games, that automatically means owning a wiiU is not even an option for me anymore. They have excluded themselves from that competition. Now lets say they do somehow have those 3 third party games I want, now the problem becomes that those games run at 1080p on the PS4 and at 720p on the wiiU, or that those games work better online on the PS4 than they do on the wiiU. Nintendo should at the very least strive for parity on the hardware, featur and content side to at least make it an even fair fight across all platforms. 

I actually think waiting to release Wii U in 2013 would have been a better idea. Release Nov 2013 with a single sku costing $299 and Nintendo Land bundled with it alongside Wind Waker HD+Super Mario 3D World as launch titles. Then they had Donkey Kong+Mario Kart in the first half of 2014, Hyrule Warriors/Bayonetta 2/Smash Bros/Amiibo/Captain Toad in the second half. The point is they would have released at a slightly lower price and actually had some big hitting software released in its first year.

Ya it would still be in last and not selling amazing numbers but they likely wouldn't have gotten off to such a slow start and had to deal with constant bad press claiming Wii U has no games/Wii U is doomed.