Wii U devs are already doing that kind of thing. Mario Kart 8 supports a ridiculous variety of controllers from both the Wii and the Wii U, which actually is great if you're me because you can suddenly do four-player Mario Kart thanks to those old Wiimotes lying around!

I hope the Switch can still talk to Wiimotes. Even if they drop sensor bar and the ability to point (which will prevent most Wii games coming to Virtual Console without substantial modifications), being able to pair with one and use the nunchuck or the classic controller would be great for someone like me who has a Wii gathering dust and a Wii U on active service.

I'm sure there's an abstraction over all of it. The game just has to support N controllers. The number of inputs necessary to drive mariokart are pretty small (turning, acceleration, menus, items). Other than maybe displaying some specific images for each controller type, I doubt the game actually cares deeply about the full vs half controller.

As the years go on and my fingers get more wear and tear, my first question seeing the tiny controller option was "I wonder how bad my hand will cramp using this" but it looks absolutely perfect for kids.

I dunno. I'll grant that it's a clever idea but those half-controllers aren't going to have all the buttons that a full controller does, so games using that mode will be restricted in what controls they have. Plus, the ergonomics is not going to be as good as a full controller as well.