"Do NOT expect the next Mario game to be ground-breaking in graphics..."
I find it funny how people assume that Mario games and ground-breaking graphics don't go hand in hand. What about Super Mario Bros 3 which looked so good for an NES game that it could have passed off as a SNES launch title? What about Yoshi's Island which was absolutely amazing looking from both a technical and artistic point of view? Despite what revisionist history has indicated good graphics and Mario games have traditionally gone hand in hand. Even the super ugly Super Mario Bros was incredible at the time of release.
The only pre-Sunshine Mario platformer that didn't look that great was Super Mario 64 but because it was such a new concept, was a launch title, and still looked better than any PSX game from the time, everyone cut it some slack. That's ONE Mario title that looked like crap and thus not enough to justify Super Mario Sunshine looking as underwhelming as it did. Launch games looked better than Super Mario Sunshine. While it very well might look just as bad the next Mario has no valid excuse for not having great graphics. It doesn't have to be super realistic but it should still look good. As least as good as SSBM. It probably won't and I'm going to justifiably criticize it if that's the case.
As for how the next Mario should play I think the full 3D exploration gameplay of Super Mario 64 still has some life left in it so there's no need to change formats. Super Mario Sunshine was a disappointing game but not a bad one and Super Mario 64 was a classic so it's not like the formula is broken. This isn't like the Sonic Adventure series which always had problems that needed to be fixed.
The problem with Super Mario Sunshine is that it changed a lot of stuff and removed stuff but didn't really improve very much. The result is no flight for Mario, no non-island themed levels, no collecting stars/shines out of order, and a new permanent water pack. Basically if for the next Mario they ditched the water pack, put flight back in the game, had a variety of levels, alowed us to collect stars out of order, improved on technical stuff (controls, camera, etc), and added some new power ups (ie: NOT permanent) they would have a sequel that although not really ground breaking would be REALLY good. Super Mario Sunshine tried too hard to innovate and the result wasn't so hot. Something similiar to Super Mario 64 that improves the formula is ideal. A Super Mario World instead of a Super Mario Bros 2.