I'm guessing from your description that's the Cotswold Line? It's increasingly atypical; south WCML services are almost always very busy if a 4-car, it's increasingly the case that 8 are needed all the time except Sunday early mornings. TPE is overcrowded pretty much at all times of day and night. The days of short trains have to be numbered except on very rural services, and even those are getting busier (I hear standing passengers are quite usual on some Ormskirk-Preston services, for instance, whereas when I was a kid not getting a table to yourself was near enough unknown).
Yes, the Cotswold Line, but on GW route the 800s will work, the same kind of loadings imbalance between peak and off-peak loads applies elsewhere, such as the Gloucester/Cheltenham, where the London service will be increased to hourly, again on the back of using five-car sets suited to likely loadings. The five-car sets will also enable the step up in frequency for Bristol. There is never going to be the demand for 1,900 seats an hour all day between London and Bristol, which running three big trains would deliver, just as the Cotswold Line outside the peak does not fill a 166 or 180, never mind an HST, so there is no point providing something with 600-plus seats west of Oxford (from which point there are lots of other London trains and more to come with electrification) - unless you think burning lots of fuel to cart around empty coaches makes sense.
So TPE trains are busy - they were built too small to start with. Somehow I don't expect any of the bidders for the new franchise will be offering a fleet of three-car trains, do you? Which bit of the WCML do you mean? Near London perhaps but north of Rugby I've yet to encounter a four-car 350 where I couldn't find a seat outside the peak even on a busy Saturday for football.
None of which has anything to do with turning D78s into dmus.