"Your name shall no more be called Jacob, but Israel." Targum Pseudo-Jonathan adds a line the plain text only implies (Genesis 32:29): the new name was given "because you are magnified with the angels of the Lord and with the mighty, and you have prevailed with them."
Notice the plurals. Angels — not one, but many. The mighty — humans too, presumably Laban and Esau, both of whom Jacob has now outlasted. The new name is a crown on a whole life of struggle, not just one night's fight.
What does Israel mean?
The rabbis offered several readings. Yisra-El — "he who struggles with God." Yashar-El — "the upright one of God." Sar-El — "prince with God." All three are true, and the Targum's language — magnified, prevailed — includes all three.
But the most important thing about the new name is what it does not erase. Jacob is not renamed in the way Abram became Abraham — permanently, with no going back. The Torah will keep calling him both Jacob and Israel for the rest of the book of Genesis. He is both. The frightened brother crossing the Jabbok is still inside the prince who emerges at dawn.
The takeaway: the new name does not replace the old one. It promotes it.