The population would absolutely be higher and the economy would be better. More startups and more people willing to work for startups since housing costs are less of a burden.
Density for IT is the least thing we need, communication, like classic Usenet, yes, but not physical density.
For economy in general beware: economy of scale works with a good but not too much density. If you densify too much the model collapse being unable to evolve at reasonable costs. Nowadays since we dream a near future with cars substituted by flying drones the right density is less than any modern city typical density and the right scale is being spread over vast territory.
Only few, industrial, activities demand higher density and localization.
it's ridiculous that we are still not building housing and transportation at scale. the automotive industry can churn out complete series of vintages faster than the construction industry sends an email.
housing is still this "my house my castle", which is fine until everyone starts to fight for, conquer and eventually annex the neighborhood.
the same sorry ass techniques are used to build housing as half a century ago, when total population was a billion less, when not 70% of the population lived in cities, and so on.
keeping housing density very high leaves space for other things around housing, eg. hospitals, schools, or ... ugh. parks. makes a lot of mixed development suddenly becomes economically worthwhile.
Reputation matters. Stereotypes matter.
This is very oblique. What do you mean?
Edit (meant to add): I believe these factors explain this better than simply reputation or prestige.
For fully or mostly-remote workplaces, to what extent does "economies of agglomeration" affect that company, relative to a more traditional workplace?
Also, in my experience, startups don't benefit from a plain ol' big talent pool in the same way that larger companies do. Startups require a very particular kind of talent, one whose supply is very limited no matter where you go, and doesn't correlate solely with total population. Here in the midwest, that supply seems to be directly correlated with proximity to the big engineering schools, which is why I mentioned the Big 10 (MSOE is also held in very high regard regionally, but again: prestige matters). Every Chicago startup I'm aware of has some tie to Northwestern, for example.