Not rumors exactly - there was an actual
tech demo used to demonstrate the GBA's sprite capabilities. But as you say, nothing ever really came of it.
I was expecting a lot more N64->DS ports after Nintendo led with Super Mario 64 DS. That said, I'm not sure what I would have wanted to see from them, beyond perhaps a Smash Bros 64 port - which would have lost a lot of its charm without the analog stick controls.