My two (thousand) cents:
1) Indy Sr. Well, I had a chance to ask Sir Sean Connery this directly (at AFI), and his response was interesting. I was told to keep it private, but if you email me, I'll be happy to tell the tale. Trust me, it's a story seldom (if ever) heard on internet rumors.
2) All other characters, I believe, should have stayed away. They get like Tattoine in Star Wars -- We hear talk of thousands of worlds but we keep going to the same damn planet. Indy is a globetrotter, with friends and enemies everywhere. Keep the variety. Keep it fresh.
3) I *do* however like what many have suggested, that ALL previous characters have a cameo at Indy's wedding. Sallah as Best Man would have rocked!
4) Sallah. If anyone should have returned, I say bring on Sallah. JRD loves this role and would gleefully return in a heartbeat. Plus, despite his age, he's very capable of doing it. Short Round as an adult would've have the magic. Willie never had it. Others are dead. But Sallah, John Rhys-Davies, he's ready and capable, and his age wouldn't hurt the character in the least.