You make some good points there.
I have to say that it wouldn't have been cheaper using physical models. You have to create the model, many for different styled ships. then you have to film them making multiple passes for lighting etc. Take ROTS for example. That opening scene would have required so many different models it would have cost a fortune to do. You have to pay for both materials and man hours. With CGI you can create one ship then re-texture it for each different ship of that type needed. There were more physical models used in the PT than people think.
The main problem with the PT was that they were badly done. Acting, directing, editing, sound design and most of all the screenplays. If those were on par with the OT then the CGI wouldn't have been such a big issue as it is now. I personally like the visuals. You have to remember that we live in a new age since the OT. Technology advances. If they had used models and had FX techniques that the OT used the movies would have been a lot worse than they are now and the casual audience would have laughed at it.
Now first i would have got someone else to write the screenplays. GL isn't good at writing screenplays. He has good story ideas but not very good at executing his ideas. He may have done ANH but the overall success of that movie was down to the editing. Look at the deleted scenes on the behind the magic CDs. The writing in the Biggs scenes was comparable to the PT. Without the great editing work on ANH i doubt we would have been here all these years later talking about Star Wars apart from how bad the film was but the FX were amazing for its time. In that respect i would ahve also brought someone else in to do the editing. The PT suffers with shots lingering too long. The editing in the OT was tight. Nothing lingered longer than it needed.
Secondly, yes, i would have stayed well clear of Hayden. I gave him the benefit of the doubt after the PT because i put his acting down to bad directing. But having seen him in Awake and Jumper i now know how bad an actor he actually is. Every character is the same and his acting is unbelievably wooden. Maybe having a different actor in that role would have given the PT the boost it needed.
Thirdly, about the fact that the jedi are very acrobatic then ever since ESB we saw a taster of what a jedi can do. luke jumping out of the carbon chamber at lightening speed and then in ROTJ doing a back flip up onto a balcony. And he wasn't a fully trained jedi. so having them doing the kind of stunts they do in the PT wasn't a bad thing. Although there is no way i would have had Yoda dong all the stuff he did. On first viewing it looked cool, just because we never saw Yoda fight. But upon more viewings it looks stupid and unnecessary and pretty laughable. But NO midichlorians. my god what the hell was he thinking. It ruined the mystical portrayal of the force.
As for the look of the PT then i would say that i can see what Lucas was aiming for. The OT was set after the Empire has taken power. The gritty look portrayed the hardship that the Galaxy had to endure since it took over. But in the PT there was no Empire and times were better. So cleaner visuals depicted a better time in the galaxy. Having a gritty look wouldn't have worked. there wouldn't ahve been that noticeable difference in living conditions between the pre & post empire periods.
The last thing is that i would not have let Ben Burtt anywhere near any part of the film apart from doing the sound FX. Look at the mess he made of the 2004 DVD's. too much control. he pushed his FX to the front and John Williams brilliant soundtracks to an almost no existent state. Talk about a big ego.
So to sum it all up: If the PT had a strong story, strong screenplay, strong acting and directing then the visuals would have complimented this perfectly instead of being the forefront. As the PT stands now the visuals stand out too much due to the really weak other elements of the movies and that's why most hate them.