Not what I would've done back there (assuming this ever happens) but, unlike some other things they've done or are planning, I can at least see some the rationale.
Coco's Mexican vibe plays off the existing southwest Frontier theme. The Spanish language obviously ties Encanto in with Coco. The best way to execute this so as to provide some long term flexibility is to do it as a, for lack of a better term, Fiesta Village with both IPs living in the same general space as opposed to two distinct mini-lands. Something like that would allow for Three Caballeros or a rebooted Zorro to be slotted in later and not seem out of place. Its really not in line with the original Frontierland concept but I bet they want to move away from the Davey Crockett-esque iteration of Frontierland anyway due its problematic elements.
Villains obviously is playing off the darker Haunted Mansion vibe. Judging by the concept art, its the least flushed out concept. How the former and ladder transition to one another is a little harder to see. The concept art makes it look like Coco is closer to Big Thunder but Coco's Dia de Los Muertos focus clearly seems to be more of a thematic match with Mansion or villains. I am not a huge villains as a land guy so if they must go this route, I hope they dump the idea and give us Nightmare Before Christmas' Halloweentown instead.
I don't think doing any of this should require complete removal of Rivers of America. Ideally (at least ideally as it relates to this specific scenario), it should just shortened like what was done at Disneyland - the northern bend being significantly reduced, curving immediately behind Fort Langhorn. WDRR either gets subsequently pushed north/northwest to keep it on the periphery or pulled in closer to the new northern bend a la Disneyland but perhaps with a tunnel through the Villains section to keep it out of sight?
That said, if I were a betting man, I would put my money on a permanently docked riverboat with TSI and ROA as we know it ceasing to exist. It would allow them to reconfigure if not remove the canal used to to take the riverboat backstage for maintenance which makes extending pedestrian access north of Big Thunder much easier.