Has anybody looked at replacing the current air filter with a high capacity K&N cold air intake. Or maybe the FRAM Air Boost?

The highlander Hybrid already has a very good cold air intake design receiving air from just under the front edge of the hood.

K&N makes a replacement air filter that fits the standard air box (part #K33332344). However, the K&N lower restriction filter element passes more abrasive particulate into the engine than the OEM pleated filter which may increase engine wear a bit. You must also be careful not to over oil them also as this could contaminate the MAF sensor which would cause engine performance problems.