My hope is that they create a totally new Wizarding World by taking away from the tram ride than converting the Upper Lot. The park needs much more. Like other here, I consider the park a half day visit. A third land makes more sense.
Another article says they will bring in the Wizarding World "as is". I don't know how they will be able to do this by ripping out the upper lot attractions. Trying to retrofit it into the land will limit or prevent possible additions. I do think Waterworld can go. The replacement can be the train station to Hogsmeade.
Some here say use other portions of the Harry Potter books instead of Hogsmeade and Hogwarts. I don't think most people are familiar with the other stories. They are featured intermitantly in the movies.
As for Gibson, retrofitting it will allow it work as a smaller venue. Many theaters are convertible that changes the seating configuration. They could tear out the seats. Add in movable walls and seats. Lower the ceiling. Why tear out something of value? Why add another couple of million dollars to the price tag?