I think the 3's are popular for their driving dynamics but more so because they just look damn good. The average Joe probably can't recognize the difference in driving feel from a test drive around the block, but they can see the spec's that there's 148 or 160hp there (vs 115, for instance), and it looks fackin' fantastic inside and out. Style and sportiness is really what's selling the 3, but the fuel economy really does hinder it.
I bet Civic the new Civic's style will be more than enough to put Mazda in a serious situation. It's a good thing the Civic won't come in a hatch, but even the fairly large Jazz/Fit will steal some buyer's I'm sure.
I don't know what the fuss with the interior of the Civic is. It's fan-tabulous. The spedo will be good for older folks, and is sharp for 'the kids'. It's the main reason - along with the futuristic and progressive exterior - that I love the damn thing. Tired of all the sameness, and the Civic looks super cool. Like how BMW has moved to make competitor's style look crusty and obsolete. More cool than the Mazda3 sedan even, although it will serve Mazda well that the 3 looks compact, sporty, and sits nicely planted on the road. They'll have to up the ante somehow tho to keep buyer interest, probably by introducing new upscale features, as I believe that Honda will undercut them price-wise as well for the must-have equipment.