I would not mess with too much. The problem with intellectual properties that are adapted for feature films is that you get some young hack writer who thinks he's the only one who "gets" that property. He then takes Jimmy Olsen and makes him Chris Rock, or Alfred becomes a mechanic named Big Al. Superman goes Matrix or Spiderman starts to dance and shuffle.
So in my opinion, leave things as they are. We all remember the Dolph NOT using the sword and using a blaster instead, or wearing a cape? Since when did He-Man wear or even NEED a cape?! Teela mugs the camera, "Woman in arms". Groan. He-Man and the Masters of the Universe needs to retain what made the story so good to begin with; Sci-Fi/fantasy with writing that challenged the intended audience. The Problem with Power was much more than just a child's tale but at the same time was engaging for a kid.
Personally I think playing up the family feud is a good idea, but without actually letting all the characters know who's who. Randor can fight Keldor, but lets make it so that Randor doesn't know Keldor is his exiled brother. Keldor was changed/enhanced by the dark magic he practices and became the blue-skinned master swordsman. So then Randor scars his brother, even though he doesn't realize it until much later. Skeletor returns years later, after Adam is born and becomes a young man to kill his brother. Skeletor then reveals his identity to Randor moments before plunging a sword through Randor's heart as Adam watches. Adam is crushed and as he holds his father's dead body, Skeletor walks past Adam, coldly introducing himself to his nephew before knocking him senseless. Adam wakes up strung up somewhere waiting for some horrible creature to devour him. Skeletor mocks Adam, telling him he is too weak to rule and that his father was a coward, unable to do what a king must do. He tells Adam all of his father's warriors are defeated and imprisoned in Snake Mountain. Skeletor leaves Adam to his demise but before whatever evil befalls him, Adam escapes but is left wandering. He has no allies, as many if not all of the masters see him as a spoiled, lazy, apathetic brat, and is completely unable to retake the throne that his uncle has usurped. He wanders the plain he finds himself in, and ultimately comes upon the remains of castle Greyskull. The castle was once a mighty fortress but was abandoned for reasons lost to history. Since then castle fell apart, but has remained a place of unease. Adam needs to find refuge and enters the castle. The walls have crumbled and the ceilings have caved in but the throne room remains strangely intact. A storm begins to rage outside and the lighting flashes cast awesome and eerie shapes on the walls. Suddenly an old crone grabs Adam by the shoulder, with a strangely strong grasp. Adam is scared nearly to death but quickly regains his composure. He shakes the crone off and tells her to go back to whatever hole she crawled from. He turns to walk away but she is somehow in his path again. She strikes a staff on the castle's stone floor, a staff she seems to make appear from no where and lighting cracks the sky. She tells him of his destiny, to lead Eternia as a great king and great warrior but first he must become the savior foretold. She tells him of the past of castle Greyskull and how his ancestors once used the castle to rule all of Eternia. However one of his ancestors turned to dark magic and tried to use his new found power to rule as a tyrant. His warriors, seeing their king as without hope, turned on him. The king allowed himself to be completely overtaken by the forces of evil and recruited a horde of evil creatures to do battle. In the end he was defeated and banished to another dimension. The castle was abandoned and the palace of Eternia was created. The evil king's son however realized the power inherent in the castle and created a steward to watch over the castle. She would be ageless and be immensely powerful. She prophesized that a great warrior would defeat evil forever and reclaim the castle. Adam is entranced, almost by magic and asks what he must do. She tells him that deep within the ruin is his ancestor's sword. It is consumed by dark magic but that magic can be turned by one who is of good heart. He finds the sword, after defeating many perils and returns the sword to the crone. She tells him he must use the power of the sword to defeat Skeletor. He asks her how to do this, and she says, "the power of Greyskull will be revealed to you when you need it". She uses her power to transport him to Snake Mountain. He sneaks in to free his father's warriors, who are all surprised that Adam was able to get in. He does not tell them of the crone or the castle but leads them to the throne room but find only Skeletor's warriors; Skeletor has take the palace. Adam leaves the masters to go after Skeletor, battling faceless warriors to get out of Snake Mountain and battles them as he flies there on a Sky Sled. In the palace throne room he faces his uncle, who is mildly surprised that Adam survived. Adam, still uneducated at battling dark forces, rushes his uncle but is easily brushed away by a blow from the Havok Staff. Skeletor repeatedly knocks Adam's attacks away, flinging him into walls, and other objects in the room. Broken and bleeding, Skeletor approaches for the final blow but Adam knocks him back and finally begins to fulfill his destiny. He rises the sword over his head, and calls for the power of Greyskull. Lighting cracks the sky and thunder shakes the palace. The sword seems to radiate energy and Adam is encircled by lighting. The energy fades and Adam is replaced with He-Man. Skeletor is unfazed by this turn of events, seriously underestimating He-Man. Ultimately He-Man defeats Skeletor who of course escapes with the help of his evil warriors who have arrived on the heels of the masters. He-Man returns the power and the masters see the man who defeated Skeletor is Adam. Man-at-Arms, Teela, Ram Man, Buzz Off, Stratos, Mekanek, and Man-e-Faces all see Adam differently and hail him as king. He declines their offer, telling them that Skeletor escaped and he must rebuild the kingdom first. We're then at Greyskull where the crone transforms into the Sorceress and she smiles, knowing that everything will be set right.
Essentially it's Hamlet with a power sword. The evil uncle kills his brother and usurps his throne. The nephew must defeat the uncle to retake what is his and avenge his father. I'm leaving out the marrying his brother's wife and everyone dying at the end, but it's very similar. The flashback sequences are LotR in scale, with massive armies of evil creatures fighting the predecessors of the masters. While I don't mention really anyone other than Adam/He-Man and Skeletor, we would see most of the masters and evil warriors but mostly in small roles. This is a He-Man movie and he takes center stage.
All 3 major bad guys were pretty awesome. I would create a 4th. Spider creatures brought to Eternia by Webster.
Prince Adam has to pretend not to be He-Man to keep his family safe. Same as Spider-Man.
Orko is a great character, even though it's popular to dislike him.
To make He-Man better I don't think anything should change, but it could be explanded upon. Like the theory of He-Ro being the son of King He-Man and Queen Teela. When He-Man gets too old to fight anymore, He-Ro steps in. Battle Cat could have a son that becomes the new Battle Cat or could turn out to be an immortal Tiger that He-Ro inherits.
Throw in something about the older characters like Man-At-Arms passing away.
Skeletor himself could turn out to be immortal but maybe Evil Lyn could usurp him and Skeletor could be her lacky, but constantly plotting to take back his power.
There could also be an ongoing back story where characters mention some great war that killed a bunch of the original characters. Over the course of the story we could get little bits of information until we pieced it all together.
Orko would have a long white Gandalf beard.
For a film I would keep many things unchanged. I love the angle of a young Prince Adam turning into an adult He-Man.
I would love for Skeletor/Keldor to be Randor's half brother , making it more of a family feud. Something along the
line that King Miro die leaving Randor the kingdom and Keldor being jealous splits half the forces and you have two waring
factions and it wages for a few years until Keldor is eventually banished. Randor having an inner circle (kinda knights of the round table)
of Warriors such as Man-at-arms, Clamp Champ, Fisto as the top soldiers.
A film trilogy would be great. It could flesh out the characters and have a rotating door of new characters.
Film #1- Would feature He-Man facing off against Skeletor and his Crew (with a reference or cameo of Hordak)
Flim#2- He-Man vs Snakemen
Film #3- He-Man vs the Horde (with Skeletor resurfacing to perhaps temporarily aiding against Hordak, Adam reuniting with Adora, and Adam becoming King of Eternia at the very end
of the film, and assuming his guise as He-Man on a regular basis, with Teela becoming the new Sorceress or perhaps queen of Eternia.
I like the idea of Skeletor having troops. It was one of the things in the old movie that I really liked...