Ooooo...I kinda hate to kick someone when they're down, but I agree with most of your post.

I can't help but believe that Nintendo dashing towards a new console must be the result of a new approach, a different approach that they believe in. I can't fathom that Nintendo will go and release the same console they have right now but with better hardware, there must be something they have faith in that they believe will bring them better console sales.

They will either:

1) Bring back the WiiMote, an upgraded version, maybe they believe people wanted more Wii?

2) A different approach to gaming or some other imput device (it can't be VR, I don't think it can, I would love to see some Nintendo fans backpedalling if Nintendo goes and bets for this after some of them have been looking down on recent VR stuff).

3) Better hardware betting for 3rd party to finally throw them a bone and release more ports?

What else am I missing?

I don't agree with that.

Nor disagree nor agree.
It's impossible to see what's exactly going on in Kyoto.

4) That "Fusion" concept being thrown around that they might unite both their console and handheld divisions.

I hate to agree. But I agree.

I was going to mention it but something about it doesn't convince me. I always felt that it was fans trying to rationalize a way for the more successful handheld device of Nintendo to pull their console afloat.

I love how you talk about Nintendo and really only say stuff about home consoles. That's not their main business for like 20 years, and with QoL and mobile, this may very well become their 4th biggest business. And for christ's sake, we all know they are not spending money on developing home console-only games in next gen. There's nothing to worry about on this side. Nintendo has always been awesome for handhelds and now this awesomeness will come to home consoles thanks to their unified platform.

If the NX runs on the merged platform concept that it seems to be, then most of their problems go away right away. That's double the output on one console/handheld rather than split development time to support each. And if the console runs on specs easily transferable from PS4 hardware, third parties won't NOT port games, so long as there's a fanbase to sell to. That's the key: Nintendo's fans need to be willing to buy third party games even if they're just ports. I understand not supporting gimped ports, but if the NX is at PS4 level or higher there's no reason to keep with this exclusive club mentality. That and that alone will determine Nintendo's success with the next console; everything else seems to be leaning their way because of changes they've made since 2014. Not in the sense that they'll take off, mind you, I'm just saying that they're evolving their online architecture to be easy to shift into a PSN/XBL clone should they want to, they're releasing games that can strain servers, etc. They just need to actually put in the effort on the hardware and they'll be fine, and rumors seem to be indicating they're looking at the way the twins did it this time around, so that's a safe bet.

They'd better be spending money right now if they want to get ready for next gen. After the Wii, they most rested on their laurels, thinking people would flock to them just for being Nintendo. Microsoft got burned for being arrogant and learned a lesson. Sony got burned for being arrogant and learned a lesson. I'm not sure Nintendo, with their current management, learns anything but, "let's try a different hardware gimmick next time."

Gaming now is so much bigger than one developer/publisher, even if that developer/publisher is also a hardware manufacturer. Just having a few games without much variety isn't going to cut it any longer.

Honestly, I'm really interested in seeing what Nintendo has learned from the Wii U experience. There are a few things they need to examine closely.

1. Old IP might bring back die-hard fans but NEW IP are what attract outside consumers. Splatoon should make that obvious. Mario won't increase their fanbase.

2. Ignore third-party developers and they will ignore you. This isn't the 90s and Nintendo can't dictate terms to anyone. There aren't just other options, there are BETTER options. Business is all about forming mutually beneficial partnerships. If the people you have now can't do that, go hire someone else.

3. Related to point number one, gaming is so much more varied now than previous generations and people want different experiences. Nintendo seems to be getting this somewhat but it's still just a drop in the platformer bucket.

4. Bring someone into upper management who understands the west. They don't need to be non-Japanese but they do need to be familiar with game development outside Japan. Shuhei Yoshida is a perfect example. Placing him in a primary role within Playstation has helped them tremendously.

5. I don't know if Reggie is good in his day to day duties or not but he sucks as the face of Nintendo in the west. Yoshida and Spencer run circles around him when it comes to gaining the goodwill of gaming hobbyists and media.

6. People in the west kind of want a good Metroid.

7. I've kind of gotten bored with this and run out of steam. Also, I've forgotten some of what I intended to say. Feel free to add to my list. I'm going to go watch One Piece.

They don't need to do something over the top. They just need to learn from the mistakes they made with Wii U, by doing the following?
1) Give it a new name that will be easy to recognize and people will know what it is when they here it. People still think that the Wii U is just a tablet add on to the Wii, if it was at least called the Wii 2, it would be selling more than what it is now. But I definitely think they need to scrap the Wii name entirely and go for something fresh.

2) Market the damn thing. Give it proper marketing and advertising so that people everywhere will actually know what it is, and where to get it. When the PS4 and Xbox One were approaching their launch, every other TV commercial in between sitcoms or sports' games would show an ad for one of the two systems.
Splatoon's marketing was a step in the right direction, now they need to do that on a bigger scale for NX.

3) It NEEDS a strong launch lineup. I've been predicting that all of their main projects and heavy hitters that they're developing or planning right now, except Zelda Wii U, have been moved to NX to help give it a strong launch. Which is the biggest thing it needs if it's going to have a chance to do well. Plus, it needs to be back by a solid lineup of many 3rd party games supporting their high quality 1st party stuff. (Though, I'll agree with the OP's 3rd point, that they don't have a good relationship with them, so that's going to be the toughest one.)

They need to get back to where they were with the Super Nintendo, strong, high quality 1st party games, with a decent quality of 3rd party games to back them up.