I think that Isaac should battle with his sword on his right hand and he could use his left hand to perform Psyenergy (in the games, he casts Psyenergy with only one hand on the world map, cities and dungeons). However, when attacking with his sword, he would grab it with both hands and after finishing the sword attacks, he would go back to grab it only with his right hand. Also, his Dash attack should be like his attack animation in the games and it would be one of the strongest and with most knockback dash attack.
As for his Final Smash, I think it should be Judgement, Odyssey, Titan Blade or Meggido. Judgement instead of Catastrophe, because it it full Earth Elemental like Isaac, while Catastrophe is a mix of Jupiter (5 Djinn) and Mars (3 Djinn). Odyssey would be similar to other final smashes, where you would have to land the first sword hit to give continuity to tha attack (if the first sword lands, then other 3 swords would pierce, being finished by a colossal blade). Titan Blade should consist one a huge blade quickly falling from the sky and trapping everybody caught while dealing damage, in the end, it will explode for more damage and knockback. As for Meggido, Isaac's sword would shine and create two areas around Isaac, anybody caught would be teleported to a GS battlefield and then you see Isaac on the top slamming a huge fire orb at the helpless fighters, would deal high amounts of damage and has a high knockback ratio.
For Djinn incorporation, I think Flint would fit well in Isaac's side smash, that would be like Ike's, but faster, weaker (on the blade) and with much less end lag. Flint would be at the tip of the blade, granting the attack more range, more power and more knockback.