For your last point, you can probably check with your Chinese friend and I'm pretty sure they don't buy the idea.
Basically our brain already has built-in text segmentation (https://en.wikipedia.org/wiki/Text_segmentation). I tried to think how I actually do that. It's more like prefix matching over a moderate large dict. It's not complicated and worked pretty well for Chinese. For your particular example, maybe the difference lies in word lengths. Most Chinese words are under 2~3 characters, makes prefix matching way more efficient.
Lack of punctuation is not the same as lack of spaces, though.
English needed spaces because the graphemes are of variable length, so without spacing there is no telling in any quick way where one meaning unit ends and another begins. The idea that Chinese "needs" spacing is a little like a UTF-16 advocate saying "what UTF-32 really needs is surrogate pairs". No, spacing is not some kind of high tech invention by English, it's a necessity that follows from the its special design (also think the use of null characters to terminate strings)
Traditional characters are easier to read, in my opinion. There's more radicals to guess the meaning. I can also use my program https://pingtype.github.io to decompose the character if I write it wrong.
Simplifying the number of strokes made it faster to write. This helped literacy because the education system is built on copying characters by rote - a terrible method, in my opinion. I prefer reading in parallel, with the pinyin and literal translations below (also in Pingtype).
What Chinese really needs, and doesn't contradict the history, is spaces between words. Imaginehavingtoreadenglishwithoutanypunctuationandyoullsurelyrecognisethatitsabarriertolearning.