There's one problem with the 737 (other than fuselage width), and it all comes back to the landing gear length.
Well, fuselage width is a rather minor one. Passengers hate it, but the more narrow fuselage should in theory also produce less drag. But a wider fuselage would surely help the 737RE a great deal.
The main landing gear on the 737 is limited by the fact that it
a) can't be stretched, coz it in that case would hit the opposite L/G. They both fold inwards, towards each others. There is no more room to extend the gear further,
b) the swivel point of the gear can't be moved further out along the wing unless the wing box is heavily modified to take the stress during hard landings.
(The red line marks the center point)Now imagine a wider fuselage. The center wing-box would be wider. This would allow for a longer landing-gear, while retaining the current wing-stress configuration.
In order to accomodate a 78 inch fan, the fuselage would need to be widened by 60 cm, thus giving a width of 436 cm. This would add 1 additional seat in each row, giving a 7-abreast fuselage. By comparison, the A320 is 395 cm, the C-919 will be 400, and the MS-21 will be slightly over 400 cm.
AdvantagesMore seats. Roughly giving the 737-700 a capacity of 172, the 737-800 - 220, the 737-900 - 250.
Better CASM (cost per average seat mile) than most competitors, if seating is maxed out.
Ability to fit more fuel tanks in the belly.
Ability to fit a larger cargo area in the belly, allowing for containers.
DownsidesIt will not be an easy task to redesign a wider fuselage. It might be easier to build a new fuselage.
The nose gear will still need to be extended slightly.
Current rules don't permit passengers to be more than 2 seats (not including the one he is sitting in) from the aisle in case of emergency. A 7-abreast airliner would need 2 aisles, making it a 6-abreast 737 yet again.
It would be heavy, and add more drag.
Range would probably take a hit as well.
Extra emergency exits needed on the 737-800.
A simpler sollution would be a 15 cm nose extension, and a 15 cm main extension, giving 30 cm wider fuselage. 406 cm is a bit easier to work with. This would match the MS-21 quite nicely. It wouldn't give the better cargo area though. On the up-side, the 737-900 wouldn't be such a tail-banger anymore.