> Why can't we consider expanding to new non-developed areas in this scenario?
Because a lot of people want to keep relatively untouched nature too.
> people are stressed
I don't see any evidence that this is caused by high density living.
> there's no sense of community
Most suburban areas, in my experience, have little sense of community. Maybe small villages are different, but in the suburban areas I've lived, at most I knew my immediate neighbours. People often tend to drive too and from the places where they are involved in community activities. If anything, I feel more connected to communities that form separate from the residential areas, and there tend to be more of them in high density city centres.
> commerce space is scarce
Is it? Near me, the densest areas have plenty of available commercial units cheaply available.
More importantly: Building densely allow for far more flexibility with the rest of the space.