In the case of Shrek, I actually wouldn't mind seeing the entire SS destroyed and open up the entrance plaza. Take out Shrek, Monsters Cafe, and Lucy and build some new retail stores along with new food options. Then tie that project into tearing down the current Universal store, current turnstiles, bakery, restrooms, employee facilities, and all of the ticket booths and customer relation buildings.
So in a perfect world in my mind you get an amazing new entrance that sets the tone for your day. To include,
1.New Entry Plaza with all new ticket booths and customer relation buildings
2.Brand New Universal Store (Two Story themed Mega Store)
3.Dreamworks Specialty Store (think Disney Stores)
4.Photo Store
5.Universal Theater (Universal Media Store in a theater setting with tons of movie memorabilia)
6.Art, jewelry, and knick knack store
7.Haunted Universal Monster Store
8.Bakery and coffee house
9.Ice Cream Parlor
10.Quickservice food option
11.Sitdown Restaurant
12.Multiple themed meet and greets with large Meet and Greet themed plaza
13.Annual Passholder lounge
14.Bar
15.Universal Vacation Club
The entire plaza would be themed around Hollywood which could easily transition to Hollywood that's already their. Large open air spaces with very detailed facades for all shops wrap the perimeter creating 360 degrees of immersive theming. Think the offspring of Universal Singapore and Main Street USA in a sense.