It wouldnt have made a bit of sense for him to choose to remain in his human body. It was crippled, the muscles and bones in his legs were atrophied and permanently damaged due to lack of use. The tree couldnt heal bullet wounds. No reason to think it could heal his broken back and years of extreme atrophy. So he would have been stuck in a wheelchair which is a death sentence in Pandora's ecosystem. But even if the magic tree could have healed him he would have still been screwed. He was a 6' human male. The human body evolved to survive earth's ecosystem. Not pandora's ecosystem. He would have had to wear an oxygen mask every time he went outside which means he wouldnt be able to live outside the military base. He wouldnt have been able to move with the speed and dexterity of the navi. The human body is significantly weaker than the navi. He would have been more vulnerable to the dangerous predators on Pandora and unable to safely move through its forests. Oh and he wouldnt have been able to engage in "hair sex" with Neytiri which is apparently a key part of navi bonding. And lastly, tho Neytiri excepted him as a human, and maybe her tribe would have come to except his frail human form as acceptable he would have always been considered an outsider to some degree and looked down on (no pun intended).
Interspecies alien human relationships are all well and good but it has to make sense in the context of the characters and the world created by the author or director. In the case of Avatar it made sense for Jake to choose to leave his human body and permanently inhabit the body of his Avatar.
Well let me tell you something, Me and one of my friends who is an artist named Hattonslayden who is a good artist (he draws human males with nonhuman females like anthros or xenos or magical creature folk and mutants) who are both the same age and were both raised/taught (his parents for him and for me it was TV shows/movies like Beauty and the Beast TV show from the 80s with Ron Perlman/Linda Hamilton to Mighty Mouse all new Adventures's episode Littlest Tramp where a human man marries a lovely blonde anthro mouse woman to Alien Nation the series to X-Men TAS to Splash and more to my big brother and my teachers to one of my mom's boyfriends) not to be a bigot or racist to anyone who looks different than us white folk even by the surface nor by deformed people or ethnicity and all to treat them all with respect even as equals with different skills/abilities. Him and i hate bigots, racists, racism, double standards (especially when we find them in ourselves) and when people act like their own "negative stereotype"
We both don't like Avataring or Shreking or other transformation stories used to side step the "we look different from each other so we cannot accept each other." to me with him that is the same as taking the classic "Guess who's coming to dinner" from 1967, if you are unfamiliar with the movie it is a story where a African-American man is dating a white woman and she brings him home to her parents and the movie centers around them learning to accept that he is a valid human being and not inferior because of his skin color. So "Avatar" and "Shrek" is like "guess who's coming to dinner" where the main protagonist magically physically changes his race to suit the parents and therefore they don't have to accept anything. Or if the white woman magically turns into a black woman to suit the parents of the black man to satisfy their notions.
As far as i am concerned, the toxic atmosphere was there to set up the bigoted ending so we don't feel bad about Jake changing forms. the element of him turning into a Na'vi at the end says to me "how you look is more important than who you are". The reason i despise this overrated turd aka avaturd because of the ending/wrong message, Take the exact same story, swap the alien theme with real life humans of different color skin and if you had an East Indian woman and a white man and suddenly the white man magically turns into the same race as her as an East Indian man it justifying racism like Avatar's ending. I still think when Cameron thought up the idea of a human X alien romance story, he should have had the genetic technology to have humans breathe the air/eat the stuff on Pandora with nanotech nanintes of their bodies to help them digest the food and filter out their lungs/nostrils to breath the atmosphere, the avatars were a waste of resources.
As we have had THOUSANDS of scifi stories where the atmosphere is 'breathable' that toxic air element was only to help set up the 'cop out' ending, including his " oh poor me, i can't walk even though it would be cheaper and faster to simply fix my legs and tweak my lungs so i can survive instead of taking 5 or 6 YEARS and MILLIONS of dollars in ultra specialized equipment to make a glorified meat-puppet for a bigoted ending as a message".
I still think Eawa or Enwy (whatever) decided not to "avatard" him up and instead fixed his inner workings to survive on pandora. If they can grow a avatar they can give him lungs that work, all atmosphereic, environmental and "leg it" reasons for humans (or jake) not to survive are as far as I am concered, excuses so that the majority of viewers won't feel a little "ashamed" when he becomes a Na'vi. Jake was in a wheel chair and knew that he would become a navi and stay that way. to me that was blatantly racist ("they could not be together unless they looked similar") and was a spit in the face of every thing me and one of my artist friends had been raised to believe in (it's the content of your character not the way you look that matters.) if the only changes to the movie had been that Jake's avatar body died and he and Neytiri still made it together with everything i said that would have been a moral ending in my point of view.
in my opinion if James Cameron now Jimmy Cammy and the makers of Shrek wanted to actually have acceptance be any part of their story then he would of had Jake's "avatar" 'die' yes Neteri would still love and accept him regardless of their differences. Same for Fiona who was a human who was cursed to become an ogress every night to find true love and to have him kiss her to break the spell, plus Fiona would be human forever and she would still love/accept him as a person and not an "inferior monster" like some of the people in the movie thought.
Me and one of my artist friends are quite big on not judging a person based off race or appearance and the integration and respect of all cultures even learning from X-Men comics/aniamted show. one of my fave artists/friends on DA does nice artwork of humans in love with Xenos, anthros and magical creature beings to show it can be a nice and expressive thing to get rid of the Shreking/Avataring and double standards in fiction (which the double standards thing is almost a throwback to real life events like the days when slavery was legal as no one who isn't white isn't considered human or a person because of the color of their skin when white folk had power/dominating egos in bigotry before Abe Lincoln came along to do things right of freeing slaves to see them as people not as dumb animals like the racist back then thought so even to treat people of different ethnics with respect and when Hitler never thought the Jews were human in WWII during the holocaust before WWII ended when the jews were finally set free of Hitler's grasp) in mainstream stuff even in some artwork to all. the "we can only be together if we are the same race" and is metaphorically spit in Martin Luther King Jr. face. He even drew an expressive beautiful pic of a human male kissing a Na'Vi female with no avatar required but with genetically modified lungs to breathe and eat and drink the things on Pandora but be who he is.
But the Shreking, Avataring, the double standards (only mutants can be with other mutants or anthros be with other anthros or aliens be with other aliens or magical creature folk be with other magical creature folk) and stupid double standard that only human women can be with nonhuman looking nonhumans is finally dying thanks to shows like Bojack Horseman, Regular Show, Doctor Who and more into the mainstream just like we all accept real life things like interracial romance/marriage to same gender marriage.