There's going to be reckoning on his position one way or another. I'd just prefer it be an active decision rather than a passive one. If he goes to the OF, the Reds won't be bringing him back to the IF. I actually expect the Reds to end up with an OF logjam in the next year or two thanks to a series of path-of-least-resistance decisions.
As for the bat, Frazier's been hitting since Little League. There's always concerns about every hitter in the minors, particularly until they put in a full big season in the upper minors. Yet I'll echo BA's John Manuel from his chat today, until Frazier's unorthodox stance causes him trouble, I see no reason to worry about it. His mechanics seem to work quite nicely for him.