I find that the 3700 at 65W wouldn't make much sense. With the 1700 & 2700 those were 65W versions compared to the 1700X & 2700X which are 95/105W versions. In this case the 3700X is already 65W so making a 3700 a 65W chip doesn't make any sense. If AMD were to make the 3700 a 35W or 45W CPU then they could have a chip that would make sense.
TDPs listed for processors typically don't correspond to the exact power that they draw under load. Both the Ryzen 3600 and 3700X currently have a "65 watt" TDP, for example, despite the 3600 having two less active cores and in turn drawing less power. The same goes for the 8-core 3800X, 12-core 3900X, and 16-core 3950X, which all share the same "105 watt" TDP. It's possible they could give the 3700 something like a "45 watt" TDP, but I suspect they are not going to reduce the clocks enough to where it would be drawing less power than a 3600, so a "65 watt" TDP seems more likely, not that it matters much.
Making marketable products out of what would otherwise be very expensive garbage can enable considerably cheaper parts and I bet AMD has many more chiplets with some bad L3 than chiplets with more than one bad core per CCX.
Yep, they could definitely cut the cache for a 3500, though I suspect they would cut the processor down to a quad-core as well. So far, the last two generations of Ryzen "500" parts have both had 4-cores with 8-threads, and I don't see why they would change that now, especially since they already have two 6-core processors, however similar they might be.
As for 4th-gen Ryzen, my best guess is that it will be a lot like 2nd-gen, offering slightly more performance than the current 3000-series processors, but probably not a whole lot more on the feature front. That could take the form of slightly higher clock rates due to a matured process, along with small architectural improvements. Maybe they'll move the IO chip to 7nm if doing so is cost-effective by that point. One possible major change I could see would be for them to move their APUs to use the same chiplets as the rest of their lineup, along with a separate graphics chiplet. That could allow them to have processors with integrated graphics and up to 8-cores. And maybe they could even use the same graphics chiplets in their next generation of dedicated cards.