Yet, small college towns can be hugely attractive as a place to live even if you're not with the college. The academic atmosphere and walkable neighborhoods are appealing, especially so to the professional class. I recall reading about Arizona State University's attempt to build livable neighborhoods for non-academics that are closely associated with university activities. An available professional workforce can be attractive to employers who want to escape the oppressive urban environment and obtain in-office quality workers. It won't happed by itself. I would require inspired developers working with colleges and prospective employers.
This is true. I think college towns are a boon, too, for remote workers who are looking for a lower cost of living than in large urban centers, without detriment to some of the nice amenities of city life.
Personally I love college towns and wish there were an effort for them to continue to thrive despite the (probable?) demise of small colleges.