The limitation is not telescope time, or amount of light, or the detector (CCD) resolution. The capability of the telescope is limited by the resolution of the optics, which is determined by the size of the aperture (mirror). Light is a wave, and when you pass it through a very small opening it spreads out, like the ocean waves coming into a harbor. This means if you look through a small opening, you can’t tell which way the original wave/light was coming from. The larger the opening, the better the resolution. With a 4-inch aperture, you can get 1 arcsecond resolution (1 arcsecond is 1/3600 of a degree.) The resolution is inversely proportional to aperture; with a 1-meter (3 feet) telescope you get 0.1 arcsecond resolution. The Hubble is about 2.5 meters, so you get about 0.03 arcsecond resolution.
Now, the apparent size of Pluto is only about 0.1 arcseconds, or only times the resolution. If the planet was separated into 3 parts (left and right ends are light and middle part is dark, for example) the Hubble can see that. But it won’t see any finer detail. The only way to get a better view of Pluto is to get closer, or build a telescope with a larger mirror.
However, it’s no use building larger telescopes on the ground, because the atmosphere causese all sorts of distortions. There are ways to use computer-controlled deformable mirrors to compensate, but the technology is not very mature yet, and the field of view is limited. So we have to launch a larger telescope, but you can’t put a larger telescope than the Hubble on the Space Shuttle. The only way out is to design a telescope with segmented mirrors that can be assembled in space, or unfolds automatically. As mentioned above, the design for such a telescope is proceeding, and hopefully will be launched before the end of the decade.
As for the pointing, it is indeed controlled by momentum wheels. (I think ‘gyro’ usually refers to devices that measure the angle, not control it) However, there are some external torques which are applied to the telescope - solar winds, photon pressure, effect of the residual atmosphere and so on. To compensate for these and keep the telescope stable, the momentum wheel sometimes needs to spin faster and faster, till the bearings break. So you need an additional method of applying external torque to the spacecraft. Attitude control jets (rocket engines) are sometimes used, and magnetic torquers that act on the magnetic field of the earth are also common.
Oh, by the way, the resolution/aperture relationship can also be thought of as a manifestation of Heisenberg’s uncertainty principle. If a particle (photon) passes through a small opening it means you measured the position of the particle to a high precision, and the uncertainty principle says you can’t know the momentum (direction) of the photon very accurately. If you use a larger aperture, you have a less precice measurement of the position, allowing a more precice measurement of its momentum.