"Trying to cram the new(ish) plane into the existing 737 NG type certification was the problem"
The 737NG or MAX would not be certified on their own cognisance. They can only fly as modifications of an existing airframe. As soon as you tried to certify them as a new aircraft they're going to be FAILED so hard that heads would spin at Boeing.
If you're going to have to get a whole new type certification then you'd address the engine positioning - which means longer legs, which means new undercarriage and hull design to take it (this is a _major_ change - aircraft are designed and built around their engines and legs.). You'd fix the wing sweep (it's too swept for the speeds used) and you'd fix the baggage compartments to actually be able to take standard aviation containers.
At that point you're spending so much in airframe modifications you're better off starting with a clean sheet.
There are 8000 backorders on the 737 order book alone (another 8000 for the A320 family), simply because this is the sweetspot in the market as far as airlines are concerned (this has a lot to do with the US's heavy subsidiation of airports). This gave Boeing very little incentive to actually innovate or invest in new aircraft design when they could just keep kludging the old design and have their tame FAA stamp the already signed off paperwork.
The way they went about covering up the issue of suppliers counterfeiting documentation on critical hull components for the 737NG (The ribs were supposed to be precision-CNC made and weren't), and ALSO covered up how badly the build shops in Kansas and Washington were battering the parts to make them fit (then filling and painting over the damage) - which is the root cause of at least 3 hull breakups/11 deaths that shouldn't have happened on landing overruns - shows that this is NOT a new thing at Boeing. (There are at least 500 737NGs flying which are at risk of bursting like a Comet at high flight cycle levels thanks to these faulty parts) - When internal auditors found this they were ignored. When they blew the whistle they were identified almost instantly due to FCC stooges who handed the complaints straight back to Boeing and hounded mercilessly by Boeing corporate.
(The FBI recently arrested people in the FAA and other US government departments who were offering to sell whistelblower data back to the companies concerned - and this ONLY happened because one of the companies did the right thing and fiiled criminal complaints. It turns out that the USA's whistleblower protection legislation has been backdoored by corrupt employees since it was enacted.)