At a first glance the idea reminded me to "Kino One", at a second thought I think it is one of the best idea considering the team, because you can let them work on the different parts without too much concerning about cooperation, and the gameplay of classics need less explanation than a new concept.

"Create your own version of your favorite games by getting more lives for them,
customizing player’s and enemies’ behaviors, and so on."

This is not a bad selling point.

But the graphics still need an own twist.

Maybe, one could write a story with little riddles as well.
For instance:
A small boy (first person, no model needed) discovers a hidden room at his uncles room, filled with collected arcade machines of him, covered with dust. He has to push a box to a machine to stand on it when playing, the machine doesn't start unless he finds the plug and it in the socket, before he can play.
He has to hide, when the aunt is calling for him and looks into the room. (No model for the aunt needed, the boy is "discovered" when the door opens before he found a place to hide.)
The goal is to play all games before the adults find him... things like that...