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From all I understand, almost all SATs, especially LEO ones have a finite life as well. Starlink ones will stay up about 5 years and then de-orbit themselves; but even without de-orbiting itself the (very low) atmospheric drag would take it down eventually after the fuel to keep it in orbit runs out

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That is correct. But balloons would be a few orders of magnitude less lifetime.

Any idea why they only want Starlink to stay up for 5 years?

It's more a physical limitation. Low Earth Orbit satellites (LEO) are closer to the atmosphere and have some friction with it, slowing it down and then gravity does its job.

To stay longer you would need less heavier satellites, with more fuel to correct their trajectory. Or fly higher and have more latency.

5 years is just a good compromise.

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