Kind of, he wanted rid of the God slot, ie the slot Highway occupied on a Sunday evening. He wanted to put Movie Premieres in their place, which is what happened pretty much as soon as the new licences came into force in 1993. As such, Highway was moved to Sunday morning when it died shortly after.
Movie Premieres didn’t last too long in that slot if memory serves, I think Heartbeat moved to Sunday nights shortly after its first series.
As I mentioned earlier, LWT lobbied hard to get rid of the God Slot in 1988, and were convinced the IBA were going to let them do it - they were going to replace it with the current affairs series Eyewitness, which would be suitably worthy but of more secular interest, and it meant people could watch both Songs of Praise and Highway, which they thought were winning arguments - so they started planning for that, only to find to their surprise the IBA said no.
When the God Slot ended, anything went in that slot. Often there would indeed be the ITV Diet Coke Family Movie, to give it its official name, which would run from around 6pm to 8pm, but there was obviously a finite number of films that could run in that slot. I most associate it with things like Dr Quinn Medicine Woman (which Granada would often opt out of for the Corrie omnibus) but there were all kinds of things there over the years, including Schofield's Quest with Pip and a series of Barrymore. The films stopped when the Sunday Corrie began in November 1996.
Heartbeat had nothing to do with the God Slot, it moved in 1993 to the familiar Sunday evening drama slot. In fact Greg Dyke's biggest effect on Sunday evenings was his concept of double drama, where ITV would have drama at both 7.45 and 8.45, as part of the station's hike upmarket.
In the heyday of religious programming on the BBC and ITV, programmes were nothing of the sort. Were the types of religious programmes we got to see primarily the decision of BBC and ITV bosses or was it a result of rules and restrictions imposed by the government and the IBA?
Like much of what you ask, this is all explained in great detail in the IBA Yearbooks of the time. In the seventies and eighties there was a body known as the CRAC, the Central Religious Advisory Committee, which the yearbook says was made up of "representatives of the main streams of religious thought in the UK", which would, as the name suggests, advise on religious issues for both the BBC and ITV, presumably including suggesting the amount of time that should be given to each religion and the current thinking in it. And in addition, the IBA had their own committee which was made up of representatives from the main churches in the UK - the Churches of England, Scotland, Wales and Northern Ireland, the Catholic Church and the Free Church.
It probably wasn't especially representative of every religion and was clearly dominated by Christianity but it was a different era and trying to suggest what should be done in the seventies from today's perspective is a rather pointless exercise.