I think his "no CGI" comment refers to the fact that he doesn't want to replace the Muppets with CG characters. There are several techniques you can use to pull off a complicated Muppet shot without CGI (the only use of it would be to remove the puppeteers). That kind of shot is a thousand times more interesting to an audience, because they just don't know exactly how it's done. With CGI, you know exactly how it works. I still know people that are amazed at Kermit's bicycle riding, or any Muppet bicycle riding (especially when they talk at the same time). And that was a simple shot! Let's not get into the complexities of Kermit walking down the street in The Muppet Christmas Carol!
Have you ever seen one of the older Muppet movies in the theater? Well, I have, and as a fan that grew up during the era of epic films like The Lord of the Rings, Pirates of the Carribean and the Star Wars prequels, I would say a Muppet movie in the theater is at least as exciting as any of those. And, I was in a theater that was packed full of fans. Fans of all ages, of all levels of fandom. It was incredible!
Paul Williams music is brilliant, and musicals (even old style musicals) have been fairly succesful lately. Their hopes to get Paul Williams involved is an absolutely brilliant thought. He can write music for the Muppets like no one else.
I think you underestimate what "today's" movie audience would want to see. Some of the smaller movies have been wildly popular (Juno). Keep in mind, too, there hasn't really been a Muppet movie that broke 100,000,000 at the box office, but does that mean they weren't succesful?
The best movies, in my opinion, come from people who believe in what they have, and are willing to fight for it. To quote Coolio when he hosted Muppets Tonight, "Hip isn't what you do, it's how you do it." The Muppets have always been hip just doing what they do best.