It occurs to me the the current revisions of nintendo hardware are very very scalable.
There seems to be little real reason to do more than scale up the processors (cpu video and audio) to higher clock speeds, add more memory, enable higher resolutions for the sake of HDTV comaptibility, and make tweaks to the controls to make the gamecube viable for the next generation.
Bring the gameboy's res to 360x240 (same aspect ratio as the gba), variable processor multiplier(keep it slow for most titles, ramp it up for 3D support), more memory, OLED screen, two more face buttons, same clamshell style as the SP, and you have a system for the new generation that not only supports the sprites and colors of the snes and nes, but also the screen resolutions.
Result. Both systems are very easily backwards compatible with the current generation, and support very generous porting (or even emulation) of the earlier generations.
Only real additions that I'd make would be to change the serial ports on the home console to USB 2.0 and make wireless controllers not standard, but clip on. Instead of plugging in a reciever to the controller port, plug in an antenna, and make the controller either accept a wire, or a battery pack and transmitter (cradled)
As for N5 launch titles, not only the staple of sequels, but also ports from the N64. Go to ign64, and look at their old reviews. There are at least 20 games worth porting. A studio could either be put together for this job, or an outside studio hired. If the source is available, all they would need to do is some small port work, and an upgrade to models and textures.
-bmfrosty (who really likes the write up and renders for the nexus)