This type of threads again? Even if the character got almost removed from the series lately? mmhh... (It's since the Sega Forums that occasionally one of these discussions randomly spawns from time to time)
There's a detailed explanation of why she doesn't fight in Sonic Battle, and it's not that. She has some morals about pacifism and non-violence and stuff... She's not the type of character who cares about reputation as far as I know. (Sega said a lot of questionable/stupid stuff including that running on ceilings was introduced by Sonic 4).
Anyway, she occasionally fights when she has to, and usually she fights along with Cheese, physically as well. She can roll into enemies and in the Advance games she can also attack by stomping/bouncing on top of the enemies uncurled.
That's kinda true, but that's also part of the character. She's serious and determined when she has to act, but when things get worse than expected and she loses hopes, she may cry... ok, that's her weakness... she's overly emotive and occasionally needs someone else to motivate her when she gets depressed due to a bad situation. According to the games, this happend only a couple of times (extra boss of Advance 2 and probably a scene in Rush, but I can't remember).
I don't think Sonic X counts at all, since the event in the anime is likely just the transposition of the same event in Advance 2.
Anyway Tails got kidnapped as well in the same game, and if we count other games as well, Sonic himself got "kidnapped" twice, put in jail in Adventure 2 and captured by Eggman in Forces... other characters have been captured as well occasionally, Tails probably being the one with the biggest record if we also count Sonic Lost World.
That can be a bit annoying, I agree, but you can't change that unless you change her background. It's the way how her mother educated her... she's more childish than your average Sonic-character-child because she lives with her mother all the time, and her mother grew her up like that. It's also the reason of point 5, and usually, in the games where she plays a role, her innocence and inexperience is put in contrast with complex situations and the character is forced to open her eyes and grow up a little bit.
Sonic Battle is the best example,: in that game initially she doesn't want to fight, but later she is put in a situation where she is forced to, and has to grow mentally to understand that in some situations fighting is better than letting the thing get worse and letting your friends get hurt.
She fits the Sonic series perfectly, way more than most of the overly edgy Dragonball inspired characters of the post-Adventure games. Sonic and Tails have been in shows for kids before, and they even have their edusoft stuff such as Sonic Schoolhouse and a game with Tails about learning music. Most of the characters in the series are cute talking animals, what do you expect... especially in the classic side of the franchise.
In conclusion, I think that transforming her in a whole different character (a robot or something else) is like scrapping her completely and replacing her with a different character, and that's not a good thing. She's fine as she is, all they have to do is to involve her more, avoid the politeness/cutesy cliche as much as possible and explore the more serious traits of her character instead, the potential is there.
I agree with your post and I also thnk the same about her potential in Sonic Forces. I had this idea of a story arc about her village being under Eggman's attack, where initially she's held back by her mother who wants to protect her, but as the resistance fails and most of the village gets destroyed, seeing all the people suffer, she decides to act against her mother's will and to fight Eggman's badniks alone (with Cheese) to defend the civilians, gaining the trust of them and Vanilla, who comes to the conclusion that while she wanted to protect Cream, at the end Cream protected her instead, and maybe it was wrong to be so protective with her limiting her freedom so much.
In my opinion this would have been way more interesting than the whole Classic Sonic and Tails story arc in the game, and in a way it would have been reminiscent of Tails saving Station Square in Sonic Adventure.
Lastly, I have an observation to make: I'm under the impression that Sega slowly started to change Cream's personality and representation a bit... first, she talking to Dead Adder saying that she doesn't fear him in that mobile game, then all the talking about her potential in the IDW comic, and for the first time in the Sonic Channel artworks, she's finally put in a pose that's somewhat kinda cool and not the usual cutesy pose she has got in all the previous years. They probably realized that Sonic X/Heroes Cream was not the best iteration of her and went back to how the character was in the Advance games, more competent, determined and brave... I hope this means they have plans to use her in more games, I'd prefer if she doesn't get replaced by Omochao and 3 chao in a car anymore.
(unrelated, but... why the heck they never got her ears right in any 3D model of her? They look good in the 2D artworks but in 3D they are always awkward and look too flat).