I think merging with CONMEBOL is the more likely scenario.
Thinking more about this, if they want to expand the World Cup, what about this...
A 4 year cycle where: (1) continental championships (Gold Cup, Euros, Copa America, Nations Cup, etc...) & World Cup preliminaries; (2) World Cup Qualifying; (3) WC Qualifying Stage 2 & Confederations Cup; (4) World Cup.
Then you re-do World Cup Qualifying, and eliminate the continental stages. Top 56 skip the preliminaries. Remaining 150ish compete for the remaining 56 spots during Year 1.
Year 2, instead of an expanded "World Cup" you take your 112 teams, and split them into 16 different 7 team groups, with 16 host nations. Over 3 weeks in the summer, you basically have a 112 team World Cup, where teams simply play the other 6 teams in their groups. Each of the 16 group winners advance to the Year 4 World Cup, under the current 32 team format.
The 32 2nd and 3rd place teams are re-seeded, and play a 2 leg home and home series against each other during Year 3, with the 16 winners taking the remaining 16 spots in the tournament. Then in the late summer you still have the Confederations Cup, with the winners of the Year 1 continental cups.
This way you keep the current 32 team format, which I think is close to perfect. But now makes qualification it's own 3 week event, so that you have world football on the stage every other year.