The only technical improvement I could think of would be some way of making Happiness more integral to raising Pokemon; maybe Happiness adds bonuses to EVs and/or EXP? I definitely would like to see a branched evolution line based solely on Happiness at the time a Pokemon reaches a given level; i.e. Friendlymon evolves at Level 22, but the level of happiness determines if it will evolve into Buddymon, Palmon, or Audifoemon. (Yes, I'm aware those are the worst made-up Pokemon names ever.) After this stage, you can evolve each of them into a third form using the standard Happiness evolutionary method, like Crobat.
EDIT: Oh, and it should get a baby evolution as well, just as an excuse to justify making a 4-stage line.
