My understanding is that for Delta, the A220 is basically a replacement for the B717s - if DL was planning to phase out the 717s anyways, to me it seems to make sense that if they can some type of deal as they phase them out, it'd be something they'd want to look into (though I'm no expert in the aviation business!).
This is about extinguishing Delta's lease obligations for the 717. They don't need the extra capacity and don't want to waste cash on lease payments for planes they don't need and so they are trying to get Boeing to agree to extinguish their lease payments as one of the incentives for a future 737MAX order. If the 717s were off the table, Delta would get a
lower direct price for the MAX - this is about transferring a liability back to Boeing. That said, Boeing is not in a great cashflow position either so at best this is robbing Peter to pay Paul.
Leaving aside questions of safety and consumer confidence, might the MAX10 be a viable replacement for the (smaller) 757s, since the new midsize replacement project seems to be on hold?
The A321neo already serves as a 752 replacement in terms of capacity (and range if Delta converts any into LR/XLR variants). That said, Delta loves low-CASM planes for denser routes. Delta currently uses the 739 for this, and so this would be the natural evolution of that role - a slight upgauge of another 15-20 seats.
Also does DL have orders on aircraft that would replace the MD88s and 90s? Or would we expect them to shift some 737s and A320s onto those routes?
Even prior to COVID-19, Delta had more than enough aircraft on order to replace the MD88s and MD90s. These hypothetical planes - the earliest delivery of which would likely still probably not take place for at least 5 years - would likely go to replacing the capacity of the aging A320s, 738s, and 757s. Given that the 737-9/10MAX and A321neo are basically fungible, you could argue about which planes Delta is "truly" replacing. But that is the likely target replacement pool since the MD88 and MD90s will be long gone before the first one of these planes get delivered.