I have no idea how removing the end-of-world Zycloboo battles would be at all an improvement to the quality of the hack...
TSRP2 is probably only SMW hack I've ever played that actually has good bosses (meaning they're fair, a significant challenge, and follow a difficulty curve overall). I do not want to find myself recommending people to play both versions because the music/storyline/spelling/grammar are better in one while the bosses are better in the other. (Because, with the original battles as a precedent, I doubt anything else would be considered anywhere near as creative.)
If this hack is designed to basically replace TSRP2 the same way TSRPR replaced TSRP1, then a major downside like this makes no sense to me.
(Though I still expect any new bosses to be fair, a significant challenge, and following a difficulty curve, of course.)
(Personally, I don't see why the storyline couldn't follow a similar pattern as in TSRPR-- only a little in the first 6 worlds (though maybe with pre-boss cutscenes), but developing into more complexity in worlds 7-8 and the secret world. I'm guessing you already have enough story development planned that you could not incorporate the Zycloboo battles, though...)
As Moose / U.N. Owen said, at least keep the Zycloboo battles somewhere. They're too creative to remove entirely. (Though a boss rush probably would not be a good idea unless they had been fought individually earlier-- the 5th and 6th battles can take a good amount of practice, especially with limited power-ups.)
Maybe you could make Zycloboo the boss of every level in the second half of world 7? That seems like it could work pretty well (if you rearrange the levels a bit and adjust the battle terrain graphics-- the 6th Zycloboo would likely fit in Underground Storage (or even Death Trap Zone))... I would probably be satisfied with that.
(Random note about cutscenes-- remember, you could also use secondary entrances for those, in the same manner as the bonus rooms. They don't necessarily need to have their own level number, as long as they share the same music. Though if you do have story scenes all throughout the hack, even that might not be enough...)
As for ports or new compositions only-- your choice. Using a Super Mario Land remix as a desert theme worked fine in TSRPR (though I would have preferred a general SMW-style athletic theme over the combinations of Koopa Beach and the somewhat bland SMB3-based TSRPR athletic theme), so a few ports probably wouldn't stand out if they're the same style overall. But a soundtrack of entirely new compositions would be good as well, of course.
What I don't think would be a good idea, though, is using more ports for the reason that they would help the remake be finished more quickly. (But I'm sure you know that already.)
(Is your "Echoes of Birabuto" port available publicly? It manages to make what was originally a very boring song sound actually good.)
By the way, the original TSRP2 has 109 exits (yay 109?), so adding one exit for each Top Secret Area would bring it up to 116. This still leaves room for 4 new exits (whether they're new secret exits or using warp overworld levels as new levels), or more if any of the Extra levels are removed.
Edit: Oh, another thing about Zycloboo and music--
The SMB3 final boss theme really feels like it's Zycloboo's theme to me (especially since it was used for Zycloboo's appearances in Death Trap Zone and Power Supply as well). Therefore, I really hope the new Zycloboo battle theme resembles the SMB3 final boss theme (the same way that many TSRPR tracks resemble SMW/SMB3/YI/SML music)...
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Advynia: a Yoshi's Island editor - Alyssa's Unlikely Trap demo 3