On Chao: I like them, but they don't really belong in Sonic. Although the idea of having something to do with the woodland animals you rescue from robots was neat, the Chao themselves are a bit too abstract for the usual designs of Sonic games. Did they ever let on that the Chao were originally going to be in another game, but ended up in Sonic? I always felt that was the case.
On Knuckles replacing the Werehog: the Adventure games did a good job of creating a solid 3D Knuckles, the problem being his levels were garbage. So yeah, if they make it faster and make it less about punching dudes, then replacing the Werehog with Knuckles would be a thing I'm interested in.
But if they ever make Knuckles playable again, that doesn't mean I want everyone else playable too. I fear before they'd even consider Knuckles as a playable character, they'd have you be playing as Tails too, which, well, no.
There's a specific reason why my Sonic Adventure 3 idea didn't have Tails. Including Tails was what got us Sonic Adventure 2.