I have to agree. Moving the station entrance to where Tropical Twister is currently would allow for the construction of a station building while maintaining the current point where the engine stops. The most that might affect this would be if the park continues to run 3-car train operations. Personally I will mourn the loss of the Boomerang Bay fence paintings right there whenever they are removed, but I think a new station building would make up for it a little.
In this scenario, depicted below, guests exiting the KI&MV RR would do so via the current path between First Aid (blue roof on the right) and the locker building (red roof). They would come into Soak City the way guests have done so since its initial construction, entering to a plaza where they can proceed toward most of the rest of the waterpark.
Guests entering the KI&MV RR would do so via a new station structure (blue roof on the left) near Pineapple Pipeline. This is smaller than the Rivertown station, but I would think it is better than corralling everybody into an unshaded pen like they currently do. They would then be able to move down the platform to all cars. The former Subway location between the new entrance and exit could be transformed into a connecting pass-through, with a new First Aid entrance being located within it.
Guests walking to/from Camp Snoopy would enter near the north (left) side of the new station where there is currently a gate.
(this map is still a work in progress, hopefully I can show more off soon)