Yeah, there's definitely a lot of wasted space....I don't think they can close the whole park to do that, It would be unrealistic. What they CAN do is close parts of it at a time and still have it open, kinda like the DCA redo. But at that point I'd hope they announce it and charge discounted tickets.
I'd see it like this: Lower Lot becomes "Production Central" with the theme being the movie set of all three of the lower lot attractions, but i wouldn't make it as cheesy as it's done currently in Florida...
Upper lot, I'd have a mini Simpsons "springfield" land kinda like in Florida (just retheme most of the surrounding buildings/restaurants), or honestly, put something else in it's place.
The studio tour would be as is, it's...the studio tour aha.
Then we have Wizarding World of Harry Potter. Done.
Then with the Despicable Me area, it is just themed to that one movie, and you would have the play area too, so it would kinda like it's own little land.
Then the western area, combined with Paris/London street, would become Suess Landing from IOA, or a similar themed land with a dark ride and some stuff that can incorporate Grinchmas. I think it would be great for USH.
Unless they're removed for a ride, Animal Actors and Special Effects Stage can just be the "Behind the Scenes" Corner area.
House of Horrors, I'd retheme as an actual ride with Universal Monsters, or the previous rumored Van Helsing ride, and I'd make part of the surrounding area a "Transylvania" like setting.
Waterworld.....um....i guess unless they remove it by then, it could be it's own mini area, or i would make it a Post Apocalypse Land with a backdraft type of show if there's room that simulates "end of world" type of stuff.