You're talking about changes that would cause the plane to be a very different plane than the 1967 737, and would then need a new type rating. If you're going to do that, you might as well just throw out the 737 design altogether and make an all-new clean-sheet design. Boeing wanted to avoid that because that costs a lot more money and pilots would need retraining on the new type. They wanted to be able to call this piece of junk a "737" and claim that pilots didn't need any new training to fly it.