This sounds like an interesting idea. The fuselage of the N1K1-J would not be wider as it could already take the Kasei in its N1K1 float-plane form (althought the shape would need to change). Thus if the Kasei gave the same power as the Homare, we might expect the same performance. The problem with this is that, at least according to sites such as
q‹ó‹@ƒGƒ"ƒWƒ"ˆê——E"ú–{ŒR, the Homare was significantly more powerful than the Kasei, especially at medium to high altitudes. For the military power we have 1300 hp at 5500m at 2500 rpm for the Kasei 21 and 1700 hp at 6400m at 3000 rpm for the Homare 21. A R-2800-10 may give an early F6F-3 1,800 at 2,700 rpm at 15,500 ft according to Wikipedia (WEP?), so we might expect a slightly smaller N1K2-J to go slightly faster with roughly the same power.
However, it is widely reported that the Homare did not show the expected power at high altitudes and the J2M5 with a Kasei 26a was considered superior to the N1K1-J as a B-29 interceptor although that Kasei is only quoted as giving 1310 hp at 7200m.
So what is going on? It appears that the problem is not due to fuel or to the water/methanol injection system as those are only relevant below the rated altitude. Poor quality bearings might cause engine failure but the power should be there until the engine blows up. By elimination I am guessing that the problem may be that the production superchargers on the Homare did not actually supply the calculated charge (does anyone have a better suggestion?).
This leaves us with the typical problem of not knowing the real performance of a late war Japanese aircraft powered by the Homare with a wide range of possible speeds and, if we take a speed, we equally do not know if it could be matched by a Kasei powered aircraft.
If we want to create an earlier acting what if, we might assume that Inoue Shigeyoshi had different views and rejected the idea of a floatplane fighter. We assume that he wanted to convert all the IJN's floatplane carriers into aircraft carriers (Chitose, Chiyoda, Nisshin and perhaps even Mizuho) and wanted an aircraft able to combine the role of fighter with dive bombing (alternatively, he believes that the Battle of Britain has shown that specialized divebombers are too vulnerable). Thus in September 1940, instead of offering the specification leading to the N1K1 to Kawanishi, he asks them to produce a fighter powered by the Kasei with the ability to carry a 250 kg bomb to a target at 400 km. What the IJN gets is a Kasei powered N1K2-J flying in very early 1942 (earlier than the N1K1 because of not having a contraprop) and arriving in service in early 1943.