I know it's not a popular opinion but given Disney's current trajectory, I feel Coco belongs in the Mexican Pavilion.
I also think that making this work would require serious changes to the pavilion (and real construction) and that the ride would need to be expanded in that process (probably behind the Frozen meet and greet with those service structures relocated and the kitchen for San Angel Inn likely reworked) but unlike the French and Ratatouille, for instance, I know this is a movie that many in Mexico would be thrilled to have representing them, it actually has a good cultural fit, and it helps create another draw to pull people to this park out of MK.
They'll be getting rid of a c-ticket to do this so it's not a complete answer but personally, I have a hard time feeling about the loss of that, knowing it was a budget-engineered reskin of the original more culturally focused ride. This change would actually feel like a happy medium between those two extremes, to me.
They'd probably have to close the San Angel Inn and the tequila bar for this though and I'm sure they don't want to miss out on all that business for the twelve years it would take them to do this. :/