Reus is obviously a clear step up compared to Walcott as a player; he is a bonafide complete player, whereas Walcott has some flaws we are all familiar with. However, without looking at any stats at all, I reckon that Walcott matches him pretty well in goals and assists. That is more than reason enough to keep him despite looking to sign Reus.
Walcott, Alexis, Reus and Chambo for two wing spots is top class. The main problem here for me, is that Wenger is really, really poor at rotating sensibly. Play those 4 in a smart way, and there are games enough to keep them all happy.
I'd look to sell Cazorla though for a couple of reasons, despite him having found his mojo again; he is garbo on the flank, his stock is high now and we should get a pretty penny for him, we have better options in his favored position. Hell, with those wingers we'd have 3 better options in the squad in Özil, Alexis and Reus in Santi's only position.