I saw a website displaying a really nice handheld NES probably about a year and a half ago. He also was working on a portable n64 at the time. Unfortunately, I do not remember the link, but I just wanted to let you know that these things are out there.
I think it would be pretty time consuming to make a nice one of these, but I highly doubt it would take more time than making an arcade cab.
Sorry I couldn't be more helpful. Good luck.