Jon is absolutely right about the Globe being a sacred money pit for Universal's private events. So that unfortunately won't be touched as far as I can guess. However, if it was up to me, this would be my plan for the front of the park, etc:
Have House of Horrors, Blues Brothers, and The Globe Theatre become space for one brand new family dark ride.
Replace Shrek with a brand new but smaller and more intimate version of Special Effects Stage or another "demonstration of Hollywood magic" type of show, and theme it to an Art Deco New York Theatre to blend in with Universal Plaza and NY Street. Keep the interior as a lavish theatre, and have the queue be filled with props and costumes, almost like a mini Universal Experience. And during the night or for Special Events, this new theatre can be used for shows for HHN or corporate or private special events.
And with the Castle Theatre no longer having the current SES, have it replaced by a new attraction, as shown on the Expansion Plan.
That's what I'd do, and I think it's a fantastic well rounded idea. But I'm not in charge, am I?
Bottom line is....if House of Horrors is replaced by anything other than an attraction or something well themed and immersive, I'm going to be extremely disappointed.
But if Universal DOES want to turn the Globe into part of a new attraction, Universal can temporarily use The Castle Theatre for special events until proper space is constructed with the new hotels.