Hmm.. Maybe I think I see what you mean...
The NES Advantage looks thin and light enough to hold in the hands... with some modding.
It looks like it needs about 1 to 2 inches depth cut off of it, to be grip compact, without losing ground stability.
The shell top does not really look that friendly to making your own button layout... So you might be better off finding a small plastic project box, and modifying that. I dunno. Plastics are a bit of a bear to work with, regarding strong joint connections. Maybe you can epoxy putty some holes in, with additional use of some fiberglass tape. Sand, then redrill in different areas, when fully cured.
The joystick itself, is not that great... But I guess its the compromise you will have to decide.. because a good mini joystick, will not exactly function like a d-pad. The travel will probably be greater on the mirco-based sticks.. making a d-pad hack poor. And adapting a stick to a dpad, may make the stick a very short throw.. with a mushy feel.
You could possibly include both dpad and minor-switch assembly's, in one controller, and yet have the bat part removable, If thats important.
I believe the japanese joysticks are an optimal use for this, as they are quite shallow in depth.
Making the handle removable, would take some sort of shaft hack however, and I cant fathom how that would easily be accomplished.