Essentially, yes. Forsaken take back Tirisfal and surface of the ruins of Lordaeron. Undercity itself is still too blighted. Night Elves get the seed of a new tree. They have to take it some hidden place (Dragon Isles obviously).
Both of these stories are likely to continue in DF. Night Elves probably need to blessing of the Aspects to properly grow Teldrassil this time. Undead probably have something with burning away the last of the blight with dragonfire.
While I'd personally love to see a revamp, I think its a jump to say that updated NPC models is an indication of a revamp. It could very well just be some internal process they have to slowly visually update old models which benefits both old and new content at the same time.