Even if you fit ERTMS, class 170s would not be appropriate for the Cambrian line in my opinion. The 158s may be older, but they are better. They have corridors between units for the Cambrian Coast portion working and the door layout allows more seats/tables/legroom compared to the suburban door layout on the class 170. The only thing better than 158s for the Cambrian would be 159s, in my opinion.
I think the 158s will need to last longer than that. 150s and Pacers must be getting near 30 years old now yet the blanket "won't buy any more DMUs" is being applied. I agree that we really need to know the CP6 plans. The only pepole who are buying DMUs, DfT, may find that they have their shiny new IEP train bi-modes running on routes which would otherwise be priority 1 for CP6 electrification. On another topic it sounds like Hull Trains might even get wires up within CP5 somehow (who's going to do that though? there's enough wiring work to fill CP5 already).