My 'growing up' nostalgia period stretches from the late 70's to early 90's. When my of my friends showed me a ZOID for the first time, it didn't take long for me to run and buy one. He had the wine red Spiderzoid (Legz / Tarantulon), but it had already been replaced by the whitehead version when I got mine.
I got a few more ZOIDS from a local mom and pop toy store. An old couple ran it, and the shelves were something of a 'smörgåsbord' for kids. My ZOID collection came to an unfortunate end when the old man hammer murdered his wife. That's what I heard through the grapewine anyways. Some boring estate agency moved into the building after that.
I remember being rather unsuccessful at modding my ZOIDS, so I think it would be fun to take something like the Neo-Blox and carry it further. This would mean losing the windup mechanisms though, and focusing more on construction and design. Another thing which I want to do is to provide a fleshed out setting, like a comic and diorama pieces to spice up displays.
I think it's appropriate that ZOIDS are ancient. Perhaps a ZOID core can lay dormant for long periods (self repairing as needed.), and build a ZOID body when the conditions are right. I've seen some old material which suggests that the early ZOIDS were life forms based around a ZOID core which can grow a body if submerged into water. Eventually people tamed the ZOIDS and evolved them into combat machines. Some of the anime episodes suggests that the newer ZOIDS can be scratch built though.
For my setting, I'd like to use ZOID cores which grow under water, perhaps by gathering up minerals. This is also how they can be repaired. Different kind of ZOID cores grow different kind of ZOIDS. ZOID cores can also reproduce asexually. Mutating them into new ZOIDS is much more difficult, and something only the ancient Zoidians could do, perhaps.
The current ZOID users are new to them. This way the reader will learn about the setting along with the protagonists. Also, if the history of the ZOIDS is a little mysterious, then I don't have to worry as much about breaking canon.

In the old EU ZOID comics, an alien species called Zoidaryans built androids to pilot the ZOIDS. Eventually the Zoidaryans died, but the Silver and Gold androids fought on. In the Japanese battle stories, the Helic republic (Gold pilots) and Zenebas empire (Silver pilots) are at war. I like the idea of ignorant androids carrying on a meaningless battle better. This would allow me to inject my own factions using the Gold-Silver war as a backdrop.
Perhaps the androids are growing aware of their situation, like a few of them did in the old comics. After having fought for a long time, they are looking to conclude the long war. The silver androids are the bad guys because their solution is seen as bad for all (or maybe they are misjudged?). The new factions of mine would be a mix of aliens and robots which get tangled up in all this. I think that's more fun than just using an all human cast.
The environment is ZOIDS is traditionally Mad-Max'y, perhaps because it's easier to animate movement across wastelands. There's also often references to a dead older civilization. there can for example be ziggurats with ancient ZOIDs laying around. It can be revealed that the ZOIDS appeared (dug up or came from space) and the Silver androids ended the war in such a bad way that it took 50 000 years for it to recover.
Ruins are still standing because there isn't much rain, and there are no plants in the ruin zones / old cities. A lot of the surviving building seem to have been reinforced, suggesting that the inhabitants were aware of their impending doom. Ruins (with windows) are great for providing a provide a sense of scale, and nice fighting environments. Car wrecks, human sized figures, and trees are also great for providing scale.
ZOIDS are often dinosaur themed, so a prehistoric flora is suitable. Much of the flora was actually lost during the last extinction event 50 000 years ago. The planet is now sparely populated by tough larger plants, such as trees. Due to the low oxygen levels of the atmosphere, all plants grow slowly, with many being thousands of years old.
The temperature on the planet varies with longitude. Both the hot equatorial zone and cold polar caps are void of life. Since the axis of the planet isn't tilted much, the planet has no seasons to speak of. This stable climate have contributed to the preservation of many ancient sites.
Only a few species of animal life survived the extintion. One of these species was a highly adaptive form of shrimp-like creature. Due to the lack of competition, this species was given space to blossom and quickly branched out to cover many niches.
Things I try to keep in mind: The setting should not so gritty / detailed that it distracts. A light color can promote silhouette readability. Modularity is always nice. Flat transparent dust covers (plastic) would work well with a blocky setting. The setting should be open to allow light to flow in. Little guys, consoles, vehicles and crates can provide smaller details which offer scale and context. The setting should have some kind of sensible function, and ideally every detail should offer something and not just be greeble.
These are the good guys. Perhaps the Gold androids (Helic model) recruited a bunch of aliens to fight on their side because the Silver androids damaged the Gold's reproductive capabilities when they fought 50 000 years ago. The Golds might also have reverse (bio) engineered a bunch of humans, since the other aliens are not humanoid enough or suitable as pilots.
Bad guys. These Silver androids (Zenebas model) use dirty tactics to win, and if they can't win they just destroy everything for everyone. They use the wine red RoboStrux color scheme because red is evil.
The Copper androids are an offshoot from the Silver androids. They used heat tolerant bug inspired ZOIDS to trek across the equatorial hot zone, and eventually made it to the southern haven. That, or they are just grunts working under the Silvers. I think their Copper color works with the wine red, whilst the Silver color works better with the teals, but I might be imagining things.
Eventually the Zoidian spectres are discovered. They're robots which carry the mind of a Zoidian, or not. They use initially use a graceful recon ZOID, but later reveal a large mean creation.
ZOIDS have a life on their own, but wild ZOIDS are still a rumor. They are based on mammals.
A primitive indigenous species could be used to demonstrate how powerful a ZOID is compared to regular tanks and such.
I like these ZOIDS because of aesthetic or nostalgic reasons.