I would like them to move in the direction of Bill Clinton economically, favoring free trade and cutting deficits.
Obviously I would view that as mostly good (though NAFTA needs reform), but the party is essentially already there. Certainly, all of their Presidential candidates have been the last 16 years. And it's not really a vote getter.
I don't see much 'radicalism.' It's only been in the primaries that we've seen Democratic Candidates take a vocally pro-Choice stance. Otherwise the bulk of the party has been emphasizing prevention more. If anything the Democrats are mostly protecting the status quo on social issues as opposed to proposing outright reversing some of the changes of the last 30+ years like the Republicans.
Personally I can't say most social issues matter to me
that much other than Civil Liberties though.
Other than Iraq the vast majority of Democrats are not offering any plans for withdrawal or scaling back the military (unfortunately IMO). In fact, quite the opposite we've seen calls for more military funding consistently as well as a more aggressive position on Afghanistan and Pakistan from the presumptive nominee. So I don't see how they could possibly become more hawkish other than abandoning their stance on that issue. Which coupled with all the other changes you propose would essentially just make them a more moderate wing of the Republican party.