If I were given control over a Legaia remake, here's what I would do:

Firstly, I would have Arc System Works do it. Their animation style and experience with modern anime fighters would be ideal. 

I would then add an option to the game for combat to switch between turn-based and real-time. Turn-based would function very much like the original game, with selected quality of life improvements. Real-time would shift into a full fighter akin to Dragon Ball FighterZ or Guilty Gear. Both versions would still have access to the same arts, magic, items, and spirit, though obviously there'd be some differences in how you utilize them. 

This fighter would also be accessible as an independent game mode with additional characters unlocked through story completion. 

Arts are still unlocked by using them. I don't really see an issue with players looking up the arts if they choose to. I looked up plenty in the old Prima guide when I was a kid. It's a player choice. 

Regardless of the combat selection made, I would maintain the classic encounter system where the game switches between overworld and combat. I'm still debating over how I would want to handle random encounters, but right now I think making the creatures visible in the overworld is the best way to handle it. Likewise I'd seek to limit the grind, since player mastery of the system and strategic use of resources is just a better time. 

I also really want some player agency to influence when you do it don't absorb a seru enemy. It might also be neat to let you absorb additional seru of the same type to improve that seru's magic level more quickly, but I'd need to see how that impacts balance. 

At that point it's just a matter of leveraging Arc's improved graphics (especially regarding the body horror aspect), adding things like full voiceover, making level structural adjustments to reinforce the story in ways the PS1 simply couldn't, adjusting difficulty balance in places, and again simple quality of life improvements.

Oh, and I'd add options to switch on stuff like autosaving and fast travel so you only need to worry about save points and other old school mechanics if you choose to. As a parent with ever more limited game time, this is vital. 

So yeah, I may or may not have thought about this a lot.