Yes, Toad should be back. But in Toad Hall, not anywhere else. I'd get rid of the bear without thinking twice...
Now, the Grotto actually works. You guys have to stop and think a bit. Fantasyland is no place for E-rides simply because the tots that wander around there wouldn't be able to enter an E-ride. On the other hand, they're thrilled by the idea of getting wet (dancing water) and meeting a character, specially Ariel.
If I had to guess, poorly accepted or not, the ride that'd best fit there is an Atlantis ride.