In my personal opinion, there is no need to redo the old cities (at least not so drastically, maybe just change a few things). The idea with Upper Nigon is good, as is the idea with the dwarves (not the dark ones). Japanese-style creatures like in Heroes 6 are definitely not needed, unless they are radically redesigned, but leaving them in their almost unchanged form...
What I mean is that giants are supposed to be large, and dungeons are supposed to be narrow in many places. They'll get stuck and die of hunger ;)
Fairies in the Conflux? That's terrible! They should live with the Elves!
Cyclops on level 6? That's nonsense!