IMO, F1 really should try to decide to either be the pinnacle of technology, or purely be an entertainment motorsport. It can't be both.
Pinnacle of technology would mean loosening the regs and not banning every single piece of innovation created by the teams (unless it's dangerous or obviously not in the spirit of the rules). This would mean bigger gaps between teams, but it is what it is. Just give them a max fuel consumption for the race and let them choose whatever engine layout/aspiration/mode they want to run. Movable aero, active suspension, 4WD, ground effect/fan technology, it's all game.
If they want to promote closer racing and increase entertainment, then just revert back to good old NA V12, manual gearbox, single plane front/rear wing and <600kg cars. Take off all telemetry and team radio, and just have a fuel and engine temp gauge in the cockpit. Forget about hybrids, saving the environment or trickling tech down to road cars. It should be the best drivers in the most spectacular and challenging cars duking it out on track instead of supercomputers on another continent crunching the best strategy and then relaying it to the guy driving.