"Although our esteemed Pal Joey feels that Mitzi Gaynor would be "frightening" as Dolly, Jerry Herman is nothing short of euphoric about this. We had a long phone conversation this morning (it's HELLO, DOLLY's 45 anniversary, thank you very much) and he said he'd be 'thrilled' to make any adjustments needed so that Matzi would be comfortable."
I have no opinion on whether she'd be frightening, but I gotta disagree with your earlier statement that "she doesn't LOOK a day over 50." Well, maybe she doesn't to you, but she looks a good deal older than 50 to me (and I'm guessing to most people). Look at this interview from a couple of years ago:
http://www.youtube.com/watch?v=ZEdkm4NOePk You also wrote that she "has the energy of a 40 year old." I'm sure that in social situations on a daily basis, she's very energetic for a 77-year-old woman. I remain extremely doubtful that she'd have the energy for a long run of eight performances a week in this role.
Anyway, in regard to
Mame: It really is integral to the show that Mame seem like a WASP. She's gotta seem upper-class. I think even Patti LuPone's biggest fans have to admit that she doesn't seem remotely like a WASP. Upper-class may be something she can pull off using her skills as an actress. After all, when she was young, she played roles like Lady Teazle. But she's really not right for Mame.
And Bette Midler (suggested by gothampc) would be a good deal less right. I mean you'd have to add a scene in which Claude Upson said to Dwight Babcock, "She seems awfully . . . non-Aryan. Are you sure she's one of us?"