Intangible cultural heritage (ICH) is a cornerstone of national identity, driving economic development and social cohesion globally. Yangliuqing New Year Woodblock Paintings, a representative Chinese national ICH, face development bottlenecks due to insufficient internal innovation and ineffective external interventions, with existing research lacking holistic analysis of its historical evolution and contemporary challenges. This study aims to establish a dynamic framework for its innovative development. It first identifies cultural ecological factors via representative case analysis, then employs an integrated EWM-DEMATEL-ISM model to quantify these factors, determine their core components, and map their influence relationships. The results reveal that technical factors, cultural merit, and resource factors constitute the core cultural ecology of Yangliuqing New Year Paintings, with cultural merit as the deep-layer cultural gene, technical factors as the intermediate maintenance force, and resource factors as the surface-level interface. Three feasible innovative development paths are proposed, centered on activating cultural merit, upgrading technical factors, and optimizing resource allocation. This research provides a new analytical perspective for Yangliuqing New Year Paintings and offers insights for the sustainable development of other ICH categories by integrating historical context with future-oriented strategies.