I really hope you do continue or remake the series.
I was always a fan of SMBZ, since day 1, so I was obviously upset that it had ended, although I know where you were coming from. I tried my hand at animation once, but life got in my way as well. It's good to see that the thought is still at least in there somewhere. It was a crown jewel, can't deny that.
With that said, I'm impressed with the remake you put up. You pointed out 3 things above, and if I may, I would like to offer some CONSTRUCTIVE criticisms.
1. Mecha sonic being replaced by Metallix: I'm 50/50 on this. Yes, it does look like a more upgraded Mecha sonic, but at the same time, the sprite that was being used gave it that look and feel that Mecha Sonic was in fact, an incomplete entity, looking for his path to being whole. Also, if he's being used now, what would you use for his perfect form? (Although, this is you we're talking about. You never cease to surprise us lol)
2. Episode 7: This wasn't as bad an episode as you may think. I think with some rework, it could be a better episode, while still keeping the main plot intact. Remember, all adventurers and heroes sometimes fall into unwanted "detours". Just a thought. (For fun, you could always just remake the 8-bit fight using the normal sprites as a side animation, just to show how it would have normally looked out of fun)
3. Basilisx: Maybe give him a lesser role? Perhaps have Mario fight the 1v1 while the others speed up ahead, only to run into the Koopalings (or Mecha Mario, whichever was supposed to be up next after Basilisx), and just cut back and forth occasionally. As far as a back story, I'm sure you can create a back story for him in no time.
4. Remaking earlier episodes: While visually enticing, part of me feels you should leave them, as they show your progression in animation, and how you sharpened your skills over time. And hey, they were good enough to put you on the map the first time, right? Why mess with classics? I think you'll be just fine picking up from the last episode