You seem to conflate system efficiency (e.g MPG) with thermal efficiency.
You're right that the peak thermal efficiency is thermodynamically determined and we're getting pretty close to it [0], or at least some manufacturers are.
However, there's a lot of work to be done in making the engines more efficient across a wider variety of operating conditions. Hybrids largely succeeded because they let manufacturers make engine torque demand more predictable / gave them new modalities to create the torque the driver requests.
You're right that variable valve timing isn't new - I'm under the impression that all new cars in America with overhead cams have it. However, systems that allow the valve's lift and duration to be set independently from the crankshaft / RPM certainly are new and one first generation system is poised to increase fuel efficiency by ~14% in a steady state cruising [1]. I'm actually surprised the increase isn't higher, the amount of friction that camshafts generate is unreal and removing that source of friction is extremely compelling (the benefits of infinitely adjustable timing and lift nonwithstanding). I was in a dyno lab once upon a time, and there was a ~500 kW gas engine on the dyno, the 4 camshafts collectively generated ~200 kW of friction at ~14,000 rpm. Obviously that's a much faster speed than any road going engine outside a sporty motorcycle (and friction is proportional to engine speed), but it does illustrate the friction at play.
Heck, simply reducing oil pressure to minimum-viable pressures yields 4-6% fuel efficiency increases [2]. There's no shortage to improvements in engine accessories (it's probably why so many of them have gone electric and are no longer driven off the crankshaft).
And the thermodynamic cycle of the engine is something we can adjust. Mazda's next gen Skyactiv-X system is poised to deliver 30% better fuel efficiency than the current system (Skyactiv-G) [3] because it's introducing compression ignition to the car. And a lot of the benefits are delivered throughout the engine's operating range.
Finally, we're guilty of treating cars as static. Better materials, more aerodynamic shapes, better packaging, etc. can contribute to massive efficiency gains. The sedans with the Prius' powertrain (the HS250h, Corolla hybrid in Japan) get much worse milage than the Prius. The reality is that the Prius is unusually light and unusually aerodynamic, it's worth at least +10% better milage on the freeway. Better materials and construction can take us a long way to better fuel efficiency.
[0]: http://www.thedrive.com/tech/18919/toyota-develops-worlds-mo...
[1]: https://www.motortrend.com/news/is-the-era-of-the-camless-va...
[2]: https://www.asme.org/engineering-topics/articles/automotive/...
[3]: https://www.caranddriver.com/reviews/2019-mazda-3-with-skyac...