The Matrix (1999)

Major issues with the sequels:

Neo stops growing. The whole reason the matrix had the impact it did is because we get to watch Neo go from a white collar office slave, to a near fetal cancer patient, to a kung fu masta, to "the one". The next two movies... he's just the one and his character gains no more depth, and his "oneness" is not explored further or expanded upon.

Massive plot holes. The whole machines attacking Zion thing was weak. If Zion had EMP technology on all of their ships... why do they resort to gangly machine-gun mechs for base defense. Zion should have been nearly untouchable for the machines not because it was underground (if Zion's ships can get into zion, why do the machines have to dig?) but because the zionites could fry every machine sent their way as long as the emp system was operational.

This could open up a plot arch where the machines start developing bio-mechanical drones and robots (using recycled human tissue) to attack that are impervious to emp effects. Or infiltrating zion using people that had been recently freed (children) who were pre-programmed to sabotage various systems. (If the resistance can load skill programs, why can't the machines?)

Agent smith's multiplicative re-appearance was cool, but obviously too much for the W. brothers to handle, as the final action scene was the worst, most anti climactic showdown in cinema history. Honestly smith was a huge problem in the sequels. It created a second hostile faction to the resistance and the machines, and turned the whole thing into a three way fight that was almost impossible to build up to coherently. Ultimately he becomes the only threat and the humans and machines live happily ever after? (wtf)

HISHE(How it should have ended)

If agent smith did come back, it should have been as an upgraded AI, but still with some of his inherent weaknesses (like his fear of smell or self preservation) that Morpheus could capitalize on at the crucial moment due to their conversation in the first movie.

Smith's defeat
Ultimately I thought it would have been cool if they had managed to lure the smith program into a trap of sorts that locked him in a sealed system. This could be represented visually by Neo and smith, or Morpheus and smith fighting in what appears to be the matrix. Turns out at some point it was switched out for an elaborate construct program. Once smith is in, the lights start to go out everywhere (The program is being shut down). Then morpheus or neo walks out through a door into bright light while smith is left in a pitch black room and we look back at him reach his hand out, as the door closes.

Oracle
The oracle should have been played by a child. She is a self renewing program, and hinted at reincarnation in the first movie. This would have been a lot easier to transition to and given a nice counter point to whatever possessed child the machines use to help attack Zion.

Architect
The architect should have been a real human that was hooked up to the matrix mainframe. He was there to help design and create a human world that humans would accept. The machines had difficulty writing a program themselves, so they needed human input. The resistance forces infiltrating the machine city/world should come across the architect's hooked up body/pod at the same time neo finds the architect in the matrix. The architect in the matrix looks stately and almost regal, the one in the real world is a withered drooling body whose eyes are covered by some headgear. The real world architect has gone insane, but is kept alive through advanced life support. He his plugged into the matrix AND conscious of his real world surroundings simultaneously. Then you wind up with a split conversation between the resistance, the architect and neo. They ask him questions, but he sometimes switches the answers, leaving the characters slightly in the dark but the audience informed.

Climax
The machines make their move, the pre-programmed children kill the guards to Zion's mainframe. Hack in and start shutting down systems. The machines launch an attack at this moment and breach the perimeter. Now you can have some sort of desperate claustrophobic battle in the hallways and tunnels of zion as people try to stay alive. Meanwhile the resistance is trying hard to crack the machine mainframe to shutdown the machines abilities to communicate before it's too late. Everything looks grim, but Neo manages to plug in to the mainframe and navigate their self defense programs (represented by some really crazy fight sequences of course) to shut it down, and cause the machines to turn on each other.

Last Ditch twist
Finally... with the machines inevitable defeat looming... the system tries to pull the plug on the millions or billions of people in the matrix(effectively killing them) as a last ditch fuck you. The architect however, is able to overpower the mainframe with neo's help, expends the last of his energy to quickly stabilize the system and remove the agent programs and finally shuts down his own life support systems and passes away, finally able to rest.

Closing
Humanity begins the slow process of reclaiming the earth. Final scene is neo in the matrix scouting for more potentials and people ready to be unplugged to help with the reconstruction.

Neo's Growth
Neo should have been exploring his abilities as the one, and been getting better at manipulating the world of the matrix as time goes on. He could be the one to write the elaborate construct program that fools smith. Also he should struggle with the mantle of leadership people wish to place upon his shoulders. Eventually he should step up and be that leader when they him, but then relinquish control after the battle is won.

Other Characters involvement in the finale
And maybe to add an extra element, it turns out there are seven mainframe facilities that need to be hacked simultaneously. So you wind up with every ship that zion has zipping out to these locations with resistance forces in order to pull off some sort of synchronized meditation hacker drum circle bullshit to shut down all of the systems and backups simultaneously with neo leading the way. This could have the original cast split up with trinity captaining her own ship. (the one that neo is on of course.)

If Zion had EMP technology on all of their ships... why do they resort to gangly machine-gun mechs for base defense?
If Zion's ships can get into zion, why do the machines have to dig?