Scaling up and down aircraft is usually done by changing their length since that's both structurally very straight forward, and it can usually be done with relatively benign aerodynamic impacts.
The 787 is significantly larger than the 737. It's not just built to have more passengers, but also to carry way more fuel so it can go more than twice as far. While you can always take off with less fuel to stave off the worst of the penalty when making shorter flights, a penalty remains.
Scaling down a 787 to hit the 737's operating niche likely means:
* Reducing the body diameter/width
* Shrinking the wings (the 787 wing has 3x the area of the 737 wing)
* Reducing the length
The first two operations are really non-trivial. Certainly not impossible, but challenging enough that calling it a "787 redesign/miniaturization" vs "clean sheet model with 787 heritage" gets really blurry.