The way I hold the Mini when reading means that smaller bezels might actually be problematic, as my thumb would almost necessarily occlude part of the display; I've had to disable edge-based paging even with the larger bezels.
My uses for the Mini are mostly book reading, watching movies on flights and some casual games (nearly always using headphones; I get the gripes about speaker placement but I've just never found it that big a deal). I've been using 64 GB models for years and really haven't found that to be restrictive -- providing I rotate my media as I finish it rather than simply accumulating it.
I continue to prefer Touch ID over Face ID, so the new Mini is just fine in that regard.
I'm also disappointed that the new Mini doesn't support v2 of the Pencil. But then again, with the v2 Pencil I'm not having any problems unlocking my car either
I'd love to see an SE-sized iPhone 8. Maybe an "iPhone 8 Mini".