Yes.
Have you ridden, or seen pictures or video, of the IJ ride in California or Tokyo? There are some cavernous, open spaces there, e.g. the bridge scene and the finale with the moving walls and rolling ball. You can often see other vehicles in the building.
If, as you say, the rooms and ride path are too narrow in Dinosaur, then they certainly won't be able to replicate the IJ scenes, as you say the new IJ retheme would have to be all projections and dark areas. Yes? But the darkness also helps to convey the feeling of being there at night during a meteor shower.
Or perhaps the internal walls can be reconfigured. Maybe. In which case the theme didn't have to be changed.
I don't think lack of space to represent dinosaurs is a major factor in the retheme, it's not something that was a limiting factor when they first built the ride.