Why should we avoid density? Societies get more urban as they progress. Density is the way of progress. That doesn't mean we shouldn't be smart and thoughtful about it, but ultimately density should be the goal.
Right now density is as you describe > a metric for progress. But that's old fashioned. Living in a $3,000 closet in SF or NYC in a building with 100 other closets shouldn't have to be a near-requirement to work for an exciting company or enjoy your time off in an exciting place.
I like to think this modern world has enough intelligence to improve our antiquated and slow modes of transportation. We've done it for communication.
Right now it's too costly to blanket a city with public transportation, for example, because the density isn't there. The same issue happened when electricity was invented, and when the telephone was invented - to build the infrastructure in less dense areas, the taxpayer had to subsidize.
Houston and LA have worse air quality and worse traffic than NYC does, despite having less than half the population. Yes, NYC and SF are very expensive, and they also happen to have very strict zoning laws that prevent the suburbs from adding density.
I think that's more of a side effect of a population increase. Though as we've seen over the past few decades, the most advanced societies tend to have a decrease in birth rates after a certain point. I don't think we should be striving to turn the entire Earth into Kowloon.
Oh of course not, that's an absolutely extreme example.
Yes, advanced societies tend to have a decrease in birth rates. Yet, they still keep getting denser, as people move to cities. Density, if done thoughtfully, can lead to increased economic output, better health, better environmental outcomes, less traffic (holding population constant, anyways), etc.
I don't think so.
Cities are much more efficient for the masses.
If you have 20 people that all evenly dispersed within 20 square miles, or 20 people within a square mile, more progress can be made in the square mile.