Goro wasn't completely digitally animated. There was a puppet.
Anyway, I think that if Moloch somehow appears in the next movie, he should be CGI for certain scenes, and for other scenes, where he has more physical actions, he should be some sort of puppet like the Licker in the Resident Evil movie.

I'd like to see him computer animated fully, like create a model, although it may not be the best option, and Goro in MK:TM turned out really well.
I'd only want them to do it completely in CG though if they made it look as though he was really there, for example, most of the times they do this, it looks like there is a different light source or something, and it makes it look just plain fake.
Then again, of course, we'll never know if we're gonna see him.

if he is in the MK 3 movie they should have the guy that play's Barney play Moloch just joking.

I think Moloch would look best as a computer generated character b/c of the way he looks.

He would look his best if all methods were used:

Quick movement, fighting in full body shits: CGI

Close ups(head shots,foot shots,talking)Anamatronics

Other: hand movement, back to camera, many little things that require realistic movment: Puppetry

If you use all CGI, It will look shitty. Only few movies have gotten away with all CGI.