There should be no penalty for casting in animal form. It should simply be obvious that you choose to build towards caster or melee and you cannot do both well. But you should be able to be a caster or a melee and still choose an animal form. I'd also love to see a few more animal forms, preferably different size creatures like squirrels and frogs, on up to the dire bear (as the largest) size. There could be some slight bonuses to hiding, dodge or ac for being really small.
I like the pet. With a great deal of investment, he should be able to survive at least in elite. The biggest gap in power is gear. You can only fit so many bonuses on two pieces of gear. What we need is pet specific gear that allows many more bonuses. At least dodge, prr, mrr, ac, hp, and maybe a displacement guard when hit. These are all defensive bonuses and wouldn't affect balance at all, simply allow the pet to have a chance at surviving more difficult challenges. Also, the AI could be tweaked so when the pet gets down to 20% health he stops trying to attack and returns to your side. Basic self preservation mode.
Too many of the high level druid spells are unuseable once you're locking into a role. If you're a caster, none of the animal spells are useful at all, and vice versa. There simply aren't enough spells that don't rely on an elemental or animal shape. And speaking of elemental shapes, we really need air and earth. Lightning is an iconic part of the Druid class and the fact that it becomes useless after level 16 or so is extremely frustrating.
Lastly, it should not cost spell points to change shape. It's not a spell, it's a natural ability.