Is it possible Apple could just make the top and bottom bezels and include 3D Touch for the bottom bezel so if you press it, it just functions as a home button and they could make Touch ID the whole bottom part?
In theory that should be possible yes. But I think the bottom bezel will be a bit too small on this new iPhone to be able to comfortably press it.
It will be interesting to see how they do the function row, what purpose will it serve for example? A Touch Bar feature is very useful on a Mac but a similar feature on a phone is completely different because it's a hand held device but also it's a smartphone. I personally don't mind if the iPhone 5.8" doesn't fit in the 4.7" I'm currently using a 5.5" iPhone 7 Plus and I like the form factor.
Maybe it will be a mixture of the force touch trackpad and the touch bar, with tapping, force clicking, swiping and for some apps extra functions.