While I agree with Gerrard that Alfredo has been distracted mentally by the recent interest in him, I'd like to think that he understands that being at Rangers -- and being a Rangers player -- has been great for him.
On the last match (Leverkusen): he didn't have his best game at Leverkusen away, but I felt that he was still trying things (although they did not come off for him) and finding positions.
On the body composition thing: personally, I am not too concerned about his body composition. Granted, I do feel he is carrying some "water weight". However, he could lose that quickly by cutting down on his complex carbohydrates and sugars while maintaining his current level of training. He could see results in as little as 1-2 weeks by doing this.
Looking ahead: I feel he will probably move on soon, perhaps to Lille or another interested club, and that the club will get the right price.
An outside chance of another season?: On the other hand, I've been thinking lately that there is an outside chance that Morelos could in fact stay at the club for another season. I'd be confident (delighted in fact) with 3 young strikers competing, plus Defoe (who is now aging and becoming more injury prone) as back-up. If Morelos does stay, it is essential for him to get back into the right mindset -- and to focus on his training and his football.