They might bring out a smaller Switch of the same power as well as a more powerful option, yeah I see that.

It's obvious, compare to SONY and Microsoft Nintendo tend to release multiple version and upgrade in the middle of their handled generation. It's the question on will or how, but more of what or when?

New tech, smaller dice, efficient cost, lead to cheaper cost for Nintendo and cheaper price for consumer and better performance and game compatibility with future third party games.

I'd love an upgraded smaller model with better hardware, but not with userbase fragmentation like you said. They would be shooting themselves in the feet.

It'd be better if it just ran OG model games at 1080p 60fps on docked mode. This would be a nice boost and would allow extra features/effects/better lightning in new games on the new model.

The only thing they should "refresh" are better Joy-Cons with the same analog sticks that are on the pro and a real d-pad. It needs to be just as precise in handheld mode as it does in console mode imo.

When I played the Switch for the first time and Breath of the Wild, I felt exactly the same way... about the other two consoles. Of course, what you define as "cutting it" and what I define as "cutting it" are probably two totally different things.

Probably will happen. 3 years for a mid-gen refresh a good compromise between the smartphone model and the old hardware model of 5 year cycles.

Everyone who said PS4 Pro and XBox One X would be terrible and splinter the market and blah, blah, blah were wrong. Both have been well received and give the consumer more options and Sony and MS take home higher profit margins off these higher end models.

It's win-win for everyone.

Nintendo has already been doing this with their portables anyway, New 3DS came out 3 1/2 years after 3DS with a more powerful CPU + a lot more RAM and there are several games that take advantage of that, this is just the next natural progression.

Switch Pro in 2020 that has PS4/XB1 tier performance (or optional performance increases for existing Switch games) would do very well.

Yes, they obviously are.

OP's assertion that it will get PS5 games hinges on the assumption that developers will naively target their next gen games as just 4K with current generation games ... 

What if they DON'T target 4K and instead decide to target 1080p/30fps with ray tracing like shown below ? 

In that case the Switch will continue to succeed with quality 1st party titles from unified handheld/console divisions, third party publishing deals like Bayo 3 and Mario Plus Rabbids, and fantastic indie support.  VC should come EVENTUALLY as well.  A number of A and AA mulitplat games will still run well on Switch as well, as they rarely push the stronger consoles anywhere near their limits.  It would still deliver console quality titles on the go, however all hope for AAA 3rd party games will be lost at that point.  In other words, much like we are already seeing today but with more Japanese games as they would have had time to catch up after the first two years.

And in all honesty, 4K is overrated so I hope PS and MS do go that route.  Unfortunately the publics facination with it as a "base" standard would have them bashing the consoles if it was not 4K, especially after X1X.  They would cry downgrade due to lack of knowledge of what it is they are looking it.

With that in mind, while I would prefer they went 1080p 60fps, I am 99% sure they will target 4K instead on the Sony and MS side of things.

Some crazy predictions in here. Sure Switch will have revisions like Nintendo's handhelds always have. It'll probably get a deluxe version to sell at $300 which will allow them to drop the price of the original, and it'll probably get a couple more versions before everything is said and done. None of these will be Switch 2, they will all be the Switch and obviously all versions will have to play all games in the library. There is no reason to try to make portable games run at the same level as current console games, thats just crazy, that's like saying you don't know the difference between a portable system and a console system.
Sure they'll upgrade to the next chipset Tegra X2 which will probably just allow games to run smoother or have higher res when on the deluxe Switch. And yeah Switch revisions should start hitting in late 2019 I would guess. But Switch 2 is obviously at least like 5 years away.