Can somebody please explain what's the difference between "new design" (gripen) and so called "old heavily modified design" (block 72 f16). how does it matter? Is capability and cost not more important ? How does a modified design make it inferior? how does it mean that it cannot be further modified? Am i wrong in assuming that a heavily"modified design" is also a template for future modification in the same way as a new design?
Any fighter (or any weapons platform, for that matter) is designed with a future-profile in mind. This allows the basic design to remain relevant in the face of fast-evolving technology. This approach allows upgrades to certain sub-systems that we see in aircraft. But this has its limits. For example, aircraft are prone to weight growth throughout their service life (due to newer sub-systems being generally heavier than the ones they replace). The designer factors this in the initial design, but only to a certain limit. As you go on modifying original designs, that limit is reached sooner or later. That is why a modified aircraft is not preferable to a newer design provided they have the same ability. The F-16's long service record does put some points in its favour. But the aforementioned philosophy should be factored-in while making a decision.
That said, I would be happy to have a design like the F-16 iff (if and only if) it is as well-thought of as the MiG 21 or the B-52 bomber which remain in service and relevant long-after their design life. How something like that can be determined w.r.t. the F-16? Your guess is as good as mine.