Very interesting post SD. Youth soccer varies a bit by geography for sure, but there are similarities. Here's some thoughts from out NC league which is a little farther along.
Like yours, our U8 and U10 Rec divisions were very competitive. The matches were hard fought, standings kept, and the end of season tournament matches would often draw well over 100 spectators. No joke.
Once we started our travel teams, the U10 division has seen the level of play drop a little bit as the stronger players moved out to travel teams. But there are still a lot of U9 players who likely will travel next year along with U10 players who aren't at that level or just aren't interested. But the division is still exciting. So while it has changed some, I've found the competitiveness of our older Rec divisions is still there - proof in that lies with our U12 division which is VERY small compared to the rest (as our league is only 6 years old, most U12s weren't playing soccer when they were 4, etc)
I will say this - even with our very competitive Rec division, the level of play at U10 Challenge is still a significant step up.
The focus on training is definitely a good one, but the trick is how much to 'spend' vs develop in house. Some clubs spend a lot of their money on player development, while the coaches stagnate. I tend to be more of the mind that coaching development should be a TOP priority since better educated coaches will result in better developed players, allowing the trainers to focus their player development skills on taking things to the 'next level', a level that rises as the coaching pool improves. This was one of the reasons our league mandated coaching certifications recently and are constantly looking to leverage coaching development out of any paid player training.
The results of your survey will be interesting to see. I know for us there is a LOT of pressure from talented U8 and U9 players to provide something more than Rec, be it an alternative training program, development travel teams, academy type training, etc. We're still debating the best option there.
I think paid trainers are a useful tool, but I also see how they can become a major drain on club finances for the benefit of the top teams, while the lower levels struggle. Some clubs balance this well, others don't.
I'm curious about the motion to change your division names? I know that PeeWee, Mite, Midget, etc are well rooted in football and basketball - but soccer is almost universally known by the 'U' moniker, and while confusing at first, I can't imagine if we still called our divisions PeeWee, Mite, and Sprite or whatever. 'U'nder X makes so much more sense because you instantly know the age level. They're 'U'nder 10 or 'U'nder 5.
Definitely keep us posted!