To be honest with you, I really have a hard time picturing Square and Nintendo nowadays. I had a played a few Nintendo/Square RPGs but I cannot really imagine anything too spectcular especially with Sakaguchi with his Mistwalker company. I am not that much of an expert on the subject but I believe that of they did create a Super Mario RPG 2, it would have to have a really engaging storyline, unique characters and enough challenges to keep in the gamer for weeks. SMRPG was kind of short, they probably make the game a bit longer and most of all, we would more Final Fantasy (Pre VII) esque bosses like Culex or the Bahamutt dragon in Boswer's castle.
As for gameplay, I would just keep as is with more timed hits, better attacks and most of all, more BGM besides the traditional battle theme, boss battle theme and super boss battle theme.