You think so, re: lingering fear of exchange? He had several exchanges with Fitch - a striker, albeit, nowhere on the level of Alvez - and seemed wiling to exchange with BJ before he demoralized him. (Also keeping in mind BJ brutalized GSP in their first fight, eye-poke-induced or not; so really, a fear would have been present there if anywhere.) I just feel that the argument you give above is a very similar argument proposed for GSP/Penn II: GSP may be unable to utilize his wrestling, and is outmatched on the feet; and, we all know how that turned out. As well, I would rank BJ's TDD due to his dexterity well above Alves'.
From my perspective, Alvez's TDD is being overestimated. You could say he has fought three elite wrestlers: Kos, Hughes, and Fitch. However, Kos took the fight on a week's notice, Hughes' loss was his third in four fights, and Fitch defeated him; and to that end, GSP dominated the wrestling-match with all three of those fighters - and so, it is difficult to estimate how Alves will fair against [arguably] the best MMA-wrestler in MMA. None of the three above had the athleticism of GSP, which usually pays dividends in GSP's fights.
Unless Alves catches GSP with an early TKO/KO, this fight will play out similar to GSP's last five fights post-Serra I: find his range in the first round, aggressively pursue TDs through the second round and beyond, wear his opponent out, and then score a convincing UD and/or finish the fight. If Alves can use brute-strength to avoid TDs, he has a chance; if not, it will be a pretty dominant win by GSP.
