Porting a AAA game from one platform to another will typically take several man years of work (assuming you are doing a half decent job), even games developed simultaneously on multiple platforms will need sub-teams of platform specialists - porting down from PC to Wii/DS/PSP will generally need a lot of changes to art as well as substantial programming effort. Probably far more time than the total development effort on any C64 game.
Maybe. It took an awful lot to make a good game on a C-64. It was all bit-twiddling. No huge (in relative terms) amounts of memory and storage, no amazing graphics hardware, no high level C-language programming and portability, no incredible tools (other than what developers made for themselves), no ready made game engines, etc. In the case of vintage hardware, you can't just look at the end result and gauge what went into it, without having spent some time there yourself. Some of what was accomplished in those titles, with that hardware and at that time in history, could only be done by a very, very small number of individual on the planet. Some games still took years because they had far fewer people involved. But the income from those games was also tiny compared to today. A lot of those C-64's also weren't used as game consoles, so the market was even smaller than it might seem.
And most of the conversion of graphical work on the major platforms can be automated. That's a huge dent in the process. Once you start talking about "porting down" to a handheld, it's not really a "port" anymore, rather a different game based on the same franchise. As such, it has little to do with the sales figures of ported titles (which few would say are
usually done very well).
As for production values, they make some of the games amazing, while others seem to use those "production values" to mask lousy gameplay. If 45 minutes of cinema-quality CGI cut-scenes, that gamers
might sit through once, is driving the production costs to such high levels, I think much of the market would be willing to give that up for good gameplay at a more reasonable price.