If we're going to go this route (no pun intended), my TTC fantasy would have it extend south through the Downsview project, continuing west along Wilson and somehow ending up terminating at Pearson or maybe one more stop to the international Centre/Malton.
Like with all subway projects, there’s always the possibility to go further. The case might not exist today, but there’s always a “relative best option”.
As you’ve said, Wilson, imo, is that best option as it’s equidistant from both Finch and Eglinton; E/W demand will grow the greatest wherever transferring N/S to Line 5/6 is hardest. Lots of services from Rexdale also coalesce on Wilson, with ridership today being quite ‘impressive’ already.
Don’t forget the interest in a new GO Station at Wilson on the Barrie Line to serve the redevelopment. With Line 4 going there too, it would create a triangle of interchanges for Lines 1, 4, and Barrie GO. Line 4 would also be easier to extend if done at the same time as the redevelopment, but that’s probably too far off.
Weston GO, Pearson, and Dufferin are all good termini options, but it’s too early to say. The need/urgency will depend on how demand grows or shrinks along Lawrence, Wilson, Dufferin (N), Keele (N) Albion rd, Weston Rd, and so on due to Lines 5, 6, and GO Expansion. I think it will drive ridership up slightly on Wilson as people try to connect to other services south/west, but only time will tell. Transit demand in general is high in this part of the city and current/recent projects only seem to graze it.