Most of the locals live on the mainland, anyways. Venice itself is a living museum at best.
When I walk in Venice I constantly meet locals I know, going around their daily life.
It's hard to see this unless you are with some of them.
And even if you see it, it won't tell you anything unless you are part of it.
It's fascinating to see how two different "species" of animals coexist and barely interact on a meaningful level.
I'm not saying it's a good situation but it's not a living museum, people live, work, love and fight there.
We can't dismiss them because we don't see them.
You say there are other priorities that make Venice attractive -- like what? You still haven't made that clear. The nice parts of the city are completely given over to tourism, the hidden corners feel abandoned and listless.
- no cars. This alone raises the quality life by an amazing degree.
- 100% walkable.
- you meet people you know all the time. Feels like a village.
- international. Many interesting characters live there. A village but an international one.
- beautiful and decadent.
And of course there's also a long list of negatives such as expensive, uncomfortable, wet, touristy etc....