As recently as a few years ago in the ramp up to the 60th, Toad was slated to get some TLC of the Alice kind. The idea was to make it a modernized version of a classic black light dark ride using projection mapping to add some life to the 2D art. Then budgets were cut.
I hope it gets funded again as this was always the most intriguing concept of the Fantasyland 60th plans to me. An animated version of Toad ala Alice's effects in the Golden Afternoon would be fantastic.
As to the rumors on this thread, other than Frozen - they don't sound like what I've heard discussed with Fantasyland expanding and evicting Toontown. From an operational perspective, cutting out the maintenance/staffing of Toad would be the only advantage as the space wouldn't be suited for another attraction other than a meet and greet and I don't think anyone would want to put a "new" item in that space as it's in the fireworks fall out zone and would have limited availability each night. That's a big driver of why they would like to get Toontown repurposed.