1. A digital frequency meter operating at up to 1+ GHz running for long hours on a lithium battery is no easy thing to accomplish, to say the least. Tricks may be possible because of the limited band.
An enhanced PIC 16F micro (32Mhz) only needs 10mAh while active, thus a small, flat pack, 1 Ah Li ion will last quite a while. A bit hi speed CMOS division logic might be needed in the front end.
2. Creating D/A (level control) and A/D (level measuring) circuits with resolution and accuracy matching the (desired) performance of the head and consuming very little energy (again, Li battery), may be a challenge.
I can do 2 decimal voltage ADC sampling to +/- 0.02V precision ref'd to a 6.5digit DMM. DAC is prob. insufficient => 28khz PWM with a LPF to get 1024 steps over the voltage range to achieve precision at the low Vpp scale of the SG504.
3. Digital calibration/normalisation is a nice thing. Your uP would have to recognise sweeping (too fast) during calibration, take care of all intermediate (non-calibrated) frequencies during normal use, creating a fluent interpolation. The simplest uP probably wouldn't do. I wonder whether sweeping during sampling frequencies would work at all.
It's a balance of power consumption vs processing. A DSP micro would have hardware DSP speeds but take more power. Since a cal. needs to be done infrequently, I don't see why a slow sweep/pause/sweep over, say a minute, can't be done once every few months as required. To use a simple micro might require a 74HC divider front end to do the frequency count.
4. Noise from the digital side would have to be very well controlled. That takes up physical space.
Yes, it would require a board sandwich with an intervening shield with a pass through cap and a type R ferrite bead. But we're not talking LNA level stuff, so it's not a big difficulty.
5. I'm not convinced that putting the display in the head would be a good thing. The limited viewing angle comes to mind
I am seeing the HMI would be on the rear of the remote head, so if it is installed on the DUT the screen will face the user.