A very large portion of houses built in the past 70 years in the U.S. are single story. My point was that even going from single story, single family housing to two story, single family housing makes a big difference in density, and that can enable walkability.
I specifically don't mean that you have to build up to Manhattan levels to get walkability. Personally, I find the skyscraper jungle of Manhattan to be a nice place to visit, but I wouldn't want to live there, at least at my stage in life.
If anything, perhaps Manhattan levels of density are not great for nice retail businesses. If the average building is 8-10 stories, there is relatively little ground level space available, rents are high, and so there is little room for experimentation. The 5-6 story Berlin (and to some degree Paris) level of density is maybe a sweet spot.
Now, this doesn't necessarily work as well for families with children. However, Berlin manages to be decent for this by having very wide sidewalks, a lot of parks, and hinterhofen. Some parts of Chicago and Brooklyn manage to achieve a similar effect with single family housing by having tightly spaced three story row houses.
Like I said, ultimately a lot of cities that are nice to live in in this way are that way because they were built before the invention of the car, so people valued this much more than they do today when the alternative is to get in their car and go to some big box store with a huge parking lot that doesn't need to be very near by.