Actually, you're wrong; you can improve the appearance by using the textures themselves. There are mods on the forum that do this; I know there are, and it's not so much about the texture resolution as it is about adding details, like armor or orc vegetation. As for Heroes on a new engine, I know that the guys have taken on a big task, and there are doubts that they will be able to handle it (unless some company hires them to make a remaster). There's still a long way to go before it's finished, especially considering that the visual style is planned to be identical to the base version of Heroes, and I haven't seen any mods for the game on the Unreal engine.
And about Unreal – of course, the visual style will initially be the same as in Heroes 5, for a simple reason: where else can you get other models? They need to be created or the existing ones need to be reworked, which also takes time and effort.