Firstly, The Little Mermaid is a Danish fairy tale without much of a California connection except the park has a lagoon area and Mermaids swim. Great theming - I expect this from Six Flags.
WDW seems to be getting the theming right by looking to put their Little Mermaid ride in Fantasyland.
And, WDW will have room to do add the Little Mermaid ride by removing the Toontown Fair area. Disneyland should have lost Toontown and that area should have moved over to California Adventure. If the theme of California Adventure is Walt's California including Hollywood - it would make sense to have the stars - Mickey and friends - live in this park.
Plus, the new Toontown could have included already proposed Disney rides and some old ones such as:
Duck Bump Ride (Duck Tales)
Mickey's Mad House
Mickey Mouse Revue (MK and TokyoDisneyland)
The Great Muppet Movie Ride
Chinese Theater's Villain Ride
Also, what is Monsters, Inc. doing in California Adventure? The ride has no connection to California or Hollywood. Monsters should be in Fantasyland as well as the Little Mermaid ride.
By removing Toontown, Fantasyland in Disneyland could expand just like WDW but on a smaller scale. A Snow White Mine Coaster and new dark rides would be wonderful.
Cars is a good movie, but it is not such and iconic film to justify having its own land If part of the "fixing" of California Adventure is to theme it to when Walt was a young man then maybe having a land focusing on Walt's love of motion (cars, trains, boats, and airplanes) would work - it could include the Cars attractions plus maybe a train ride through the California desert to view native animals with a comic theme like the Jungle Cruise. And maybe Soarn' could move there, too.
Golden State could focus on the great outdoors by including A Bug's Land and maybe a fun dark ride with Donald camping with Chip and Dale.
The only part of the California Adventure that is working in terms of theming is the boardwalk area of Paradise Pier.
Disney is correcting a poorly designed park with a hodgepodge of things instead of creating a coherent theme.
I feel like Faye Dunaway in Mommy Dearest