Number one on my list would be: A true wake-up attack.
One that doesn't get stuffed by everyone's low-pokes. Even if I have to spend a bar and make it Ex, I'd be okay with that. That way, Quan's defense would improve drastically. Thus, he wouldn't have to spend most of his meter for breakers and some actual offense.
Secondly (and I guess thirdly), would be U+3 being hit-confirmable, and 2, 1, U+3 being able to link to trance.
I know what you mean by on-the-fence. If his D+1, or even all his strings in general, were faster he'd be too damn good.
Skeletal boost needs to be changed to a more beneficial use, or just gotten rid of all together. The move is almost a joke. I need to burn a bar to guarantee what buff I want.
Example:
I make the very unwise decision to end a combo with 1, 1, 2 instead of 1, 1, sky drop. When I do launch the opponent, I activate the boost (not the ex version) and I luckily enough get the damage one. By the time the hand has air hi-five'd my back, my opponent as already done either, A. a wake-up attack, or B. a recovery roll. If it was route A, I would have to either dodge or block depending on what wake-up attack is used. Destroying my buff before it's used. If they take route B, I have to now hop through an obstacle course to get to my opponent.
In
The Quan Chi Improvement Thread m2dave states that they should have different button inputs. That idea would be awesome. If this were the case, I would hardly use damage boost. I would just use health boost. It could be pretty creative to get some distance on your opponent and trigger the health boost. Effective? That's a whole 'nother story.
Now about those runes....
His runes are somewhat safe on block. I believe they're safe up to sweep distance. Any closer, if it wasn't an Ex Rune, you'll be eating some combos. Don't quote me on the specifics. I really need to test his rune. If that rune caused knockback like Shang's ground fireballs. I would be doing on-the-fly runes a lot more often. Also, if they were like that, I would be ending a lot of blocked strings with rune.
EDIT:
....2 useless special moves (Skeletal Boost/Ground Burst.)
Regular Ground Burst is debatable on it's uses, King. Ex Ground Burst on the other hand, is very viable. Especially, for setting up frame traps and some sort of 50/50 situation.
In some situations, if your 2, 1 is blocked, you can use Ex Rune to get a stagger state. During this stagger state I believe you can mix up into a F+1, 2 or a B+3, 1+2 into your choice of trance combo to keep the mix-up going, providing they don't fuzzy block it. U+3 can be used, but I would only use it if you know your opponent will block (low), or if you don't dash towards them (giving you space) and you know they won't block and try to punch their way out of pressure.
DOUBLE EDIT: His spacing on his whiff'd sky drop needs to be changed to. Go behind the opponent, they crouch block you eat a combo. All of his strings have pretty decent range. I don't see why he needs to land THAT close.