I'm talking out of my ass here since I don't completely understand the technical side, but I'll give it my best shot:

I think there is an extent of asset reusing in Bowser's Fury though not by much. Mainly that every enemy now has cat ears, rather than just goombas. If a lot of assets were reused like those were reused than that would leave a lot of room for new stuff.

Nintendo is usually really good with keeping file sizes down though so I wouldn't be surprised if old models ended being repurposed.

If assets themselves are brought up to 1080p (from the base game) then that might take up extra space, but these Wii U ports usually just use resolution upscaling (which doesn't really increase file sizes). My bet is that the OG game's file size (1.7GB) is still the same here.

Personally, I think Bowser's Fury will have 4 sections of the world (Plains / Beach, Snow + two others) with the black substance slowly lifting as more of the map is revealed. It won't be a full game but still a satisfying 3-5 hour adventure. From what we've seen it looks like 1-2 hours max, so I'm really hoping they're hiding a lot of the world.