An interesting machine--innovation can be a double edged sword sometimes. The exhaust was crazy hot for some reason (~1000C) which required double-walled pipes AND a shroud (if that's the term). Elaborate oil/water cooling system too.
Despite Mazda's hard work on the rx7 over the years (first generation gets the nod from me), Wankel rotary engines are funny beasts. On paper, they have the goods in terms of mechanical simplicity, compactness and smoothness of operation. In the real world, fuel efficiency, high emissions and shorter lifespans (before a rebuild) bring them down.
Direct injection and better engineering might see a resurgence in the concept. Since they work better with a constant load, I'm guessing that rotaries might work well with CVTs.
EDIT: I don't think it's possible for a Wankel rotary to seize up, due to their design. Something to do with the aluminum case expanding more than the iron rotors to accommodate the uneven heating caused by rotary combustion.