Well if we talk about fligh as a concept I don't really see how much more you can improve on it. If you are talking about MS flight simming in general then of course there is only one good way: and that is up.

The fact is Microsoft, especially in the case of their flight sim, need to look out on the market and see how much more technologically advanced and efficient other game engines are. I dont want to be mean but the current FS is like a 90s game engine spruced up with a few shaders. It is more than hopelessly outdated.

Take a look at games like birds of prey, hawx, ace combat, and so on. Those are awesome new game engines that not only look better but are so efficient at scaling you get mind-blasting visual performance, detail and range on a simple nvidia 8800gt card (I know: I ran birds of prey on max on my 8800gt)
But those games have new game-engines that are modern, which means super-efficient rather than just prettier and with lots of cool graphical shaders. They can show 5x more detail at 15x less cpu and gpu power AND with awesome lighting than fsx's horribly decrepit joke of a game engine that cant even render the lighting difference between a cloudy and sunny day.

The second major issue is the gameplay of MS flight sim. Let's face it the majority of us have put in a ton of effort to learn how to use all the systems in MSFS. It is one of the most unfriendly games in terms of aiding new players get a grip of the game.
Continuining on this issue there is not alot to do in flight sim besides the missions and free flight. For guys like us that are more core-group that's OK since we have the patience and interest to make up our own flights and activities. But if you want more people in you have to have some sort of gameplay content so that they can enjoy it.
Hell just off the top of my head: why not have a career mode? Scoring points in flying ability, fuel efficiency, landings, flying and landing in hard weather. You start out as a bush flyer of sorts and move on up through a variety of jobs (not necessarily just jet liners but things like coast guards, navy, firefighters, etc.).
Have a massive large mmo-like dynamic SP-career mode like that. Get airlines in on sponsoring MSFS careers and the best can win prizes like a paid holiday with the airline.

That's just one idea, you can put in so much more. And of course: this combined heavily with many learning aids and missions.

In fact: add a casual gameplay on/off switch that automates alot of difficult things. An example would be to have a first officer that puts in all the ILS settings when you get a runway so that a casual guy or gal doesnt have to look for which runway it is, which frequency the ils is on, which course, how to set everything.
In general to snatch casual gamers in you dont need to remove complicated stuff: just add buttons to automate the complicated stuff. Add visual cues like green neon strips marking the runway you need to land on and a visual glide-slope that looks like those light traces from tron.

And so on...

But of course to go back to waht I wrote in the beginning: it depends on which concept of flight simming you go for. MSFS or "Flight". I don't think Flight can work, it's too light and fluffy even for casuals.

I would disagree with your second point.  PCs are not dying.  Tablets are a nice tool, but not a replacement for a home PC, unless the only thing you use a PC for is internet access.  I use my PC for a lot of typing documents, managing spreadsheets for budgets and such, stuff a tablet is not optimum for. 

That being said, laptop computers may be threatened by tablets, but I still think there is a market for those as well.  In short, tablets are nice useful tools for what they do, which is internet and multimedia, but they do not compare to actual computers in terms of usefulness.