Mario has a giant cap for a reason: so Nintendo didn't need to animate his hair or eyebrows. That was back in the 1980s, though; if Mario was being designed now - or, heaven's forbid, being redesigned - there's every chance he'd look a little more realistic.
Maybe not this realitic, though, which would be a shame. I look at this guy, with the hairy arms and the grey hairs and the trucker's cap, and I think, it's Nintendo's equivalent of Max Payne's Brazilian meltdown. Which would be very cool to see.
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It's the work of artist Mike Meth, and you can see more of his work here.