I think the pros/cons shift very quickly once the children get into their teenage years. when they are young and there are other children in the neighborhood, it is much easier for the parent to relax and let them go play together in the cul-de-sac. rough deal for the kid though if they don't manage to make friends on their street.

when they get older, they develop more specific personalities/interests and they are likely to go to a larger school and make friends that live further away. when I was a kid, I lived basically right on the border between the city and the suburbs. all my friends lived just a little too far away to walk/bike to their houses, and the streets were busy enough that I doubt my parents would have let me anyway. any plans I made had to be convenient for my parents, and they tended to be pretty busy.

this is just my opinion, but I think "real life" doesn't really begin until you can move around the world on your own. for me, this wasn't until I got my license near the end of high school (which represents its own danger; teenagers are terrible drivers). I suspect my friends who grew up in the city, taking public transit to hang out with each other, had much richer teenage years than I did, maybe even safer.