NineTailSage
Bob-omb
I don't think a ~38.83% increase in die size (from 118 mm² to ~165 mm²) is a trivial increase in size. Just to show that a ~38.83% increase in die size is not trivial, the Apple A15 Bionic has a ~22.72% die size increase (107.7 mm²) compared to the Apple A14 Bionic (87.76 mm²).
Assuming Nintendo uses Samsung's process nodes (Samsung's 8 nm** process node or more advanced) to fabricate Dane, the power efficiency gains are probably not large enough to warrant reducing the battery capacity without also reducing battery life.
The OLED model is already slightly more wider than the Nintendo Switch. So the question is will Nintendo be willing to make the DLSS model* bigger at the risk of making the DLSS model* more uncomfortable in handheld mode with the Joy-Cons attached? (I think playing the Nintendo Switch in handheld mode with the Joy-Cons attached is not very comfortable.)
One potential difference between Apple and Nintendo is that Nintendo's probably not going to mention performance improvements at all when marketing the DLSS model* whilst Apple puts performance improvements front and centre as one of the main marketing points when marketing the iPhone x*S models. So I don't think the general consumer is going to automatically assume that "S" stands for "Super" if Nintendo decides to name the DLSS model* the "Nintendo Switch S", outside of enthusiasts, especially if Nintendo doesn't mention the performance improvements at all when marketing the DLSS model*.
x*→ any numeral (e.g. 11, 12, 13, etc.)
I think percentages can make anything sound like its more than what it is (not that it makes it non existent) but transistor density of the node is also in question. We know what Nvidia are currently achieving with Ampere but Samsung has clearly gotten higher density products out of their 8nm process in the past.
The Switch is uncomfortable to play in handheld because there's no ergonomics in the hand placement design. Even the Joy-Cons on their own are awkward to hold when separated from the console, so that's one area they can definitely improve on down the road...