Being tied to the 'slot' and not the 'item' is the one that I want the most, and have wanted since day 1 of xmog.
Because when you start leveling at the beginning of an expac or whatever, you take your xmog look that you've created and watch it get piece-mealed out into more and random crap slapped on while you level, because many won't waste gold to xmog some leveling green that you will be replacing in an hour, especially with the "vendor value = xmog cost" inflation in current 91+ gear.
The being able to swap looks on the fly in the field, meh, care less about that, because it isn't like I swap the xmog looks very often. I swapped my Pally from his T4 w/ Hammer of Naaru to Heroic T10 with Torch of the Damned after questing in Draenor and running alongside Maraad, since it felt awkward looking just like him. Other than that, I haven't had any desire to swap the sets I had built for most of my characters, other than the fact they are in leveling shit so none of them are currently IN a xmog set. (Again, I have wanted #1 since the beginning)
As to the item turning into a D3 style system of simple drop downs, I suspect that will be coming anyway at some point.