I just found out (all by myself!) that there actually was an idea for a sequel to NiGHTS. It was called Air NiGHTS, and was supposed to use a tilt sensor in the analogue pad of the Saturn. There was also a rumour that they wanted to use a motion sensing wand as a new controller for the game.
However, it was delayed, moved to the Dreamcast, and eventually cancelled. Also, as others have said, Naka didn't want to make a sequel because at the moment, he can't improve anything other than the graphics. So, after learning this, a Revolution iteration is very likely, and I don't know why we didn't see this earlier.
Very interesting..