The number of shares reported is the number of shares existence -- not because of naked shorting or not.

Naked shorting would not increase the number of share available to be bought. But not the total number of shares in existence.

This is the same way banks use deposits to make loans. The dollar is the same dollar, but can be spent multiple times. Hence the money multiplier effect. The number of dollars in circulation is a constant. The number of times a dollar can be spent can be more than one.

At some point the loan still has to be paid off, which requires me, eg, to acquire a dollar somehow, then pay it back to the bank -- with interest.

Hate to break it to you, but I can borrow a share and sell it to you and then I can borrow it back over and over again.

Perhaps the issue there is that in this scenario (I have a share; you borrow it from me and sell it to me; then you boroow it from me once more and sell it to me again) currently it's treated as if I own three shares (though two of them have marks on them that they can't be lent).

Perhaps it should be explicitly treated as if I have one share, and two "claims on shares" which are likely to materialize, but are not guaranteed to do so - to make that distinction clear, to ensure that the lending for a short actually involves the lender temporarily giving up that share instead of just marking it as "used".