I think a realistic portrayal of The Penguin would work very well, especially how people like Kegek
have described his possible portrayal.
I mean, how is The Penguin any more harder to interpret in a realistic setting than The Joker or Two-Face? Scarecrow wears a mask. Oswald Copplebot is simply a pudgy gangster. Imagine someone like Philip Seymour Hoffman in the role, a high caliber actor, and anyone can take a character and not make it a caricature. Heath Ledger's performance as The Joker comes to mind.