...or even understand why the interesting nuggets are interesting? One thing I appreciate about (good) journalism is highlighting implications that I would not have thought of myself, because I lack sufficient background knowledge.

But which local outlet does that? The local news I have access to certainly not.

They still provide summaries, meaning the needed time-investment to get a base level understanding of relevant topics is radically lower.

I think somehow dreaming up a local newspaper that does the same in-depth reporting as, say, the New York Times is just dumb and and doesn’t really help someone arguing in favor of local journalism.

Just summarizing the most important points that were discussed during a council meeting is actually plenty good enough. You could do better, but even just that provides quite a lot of value.

In most cases they don't. Which is the issue.

A number of years back, my town had a very good local newspaper that was sort of someone's labor of love but they became ill and, now, no newspaper. I basically have no knowledge of what's going on in town unless it rises to the level of importance where it gets coverage beyond the town lines. To be sure, I'm not really interested in most of what goes on but it would be nice to know.