You make a lot of good points BrianSac - particularly about perception. I believe perception can create a certain reality which is why I always say that the worst thing Sacramento can do is play in safe. To rephrase Laurel Ulrich's often used quote about women- 'Well-behaved cities seldom make history.' It might have been wburg who pointed out that Sacramento was the "sin city" of the valley. All great cities are places where the human spirit feels a little more liberated and where sensibilities are a little more challenged.
I think everyone agrees that we need to increase the population of the central city but I don't think trying to lure lots of suburbanites is going to work. Haven't we been trying to do this for last 50 years w/o much success? In Sacramento today there aren't a lot of avantages to living in the core vs the living the burbs - economically or socially. We can't do a whole lot about the economy (it will always be more expensive to build and live in the core) but we can increase the amenities within the central city to make it worth the cost of living there. This seems to get lost in the all arguments for more housing.