Whens the last time...

Isn't the most important thing for them to do to first aim to recapture the 300k~ player deficit between FFXI's peak and current population? ie. winning back the people who used to play FFXI but now don't for whatever reason. I think for this reason they shouldn't stray too far from XI.

The Japanese MMO market hasn't progressed that dramatically, WoW doesn't even exist here. An revamped FFXI would sell just fine if it were developed competently. There's plenty of potential players to attract without cannibalizing XI (as proved by the fact that XI's population used to be 500k). There's no need to invent the wheel.