I disagree with using Union Station's high ridership numbers to justify a connection with the DRL. I travel south on Yonge during the morning rush, often to Union. Based purely on observation, King and Dundas are tied for having the greatest number of people getting off the southbound trains. For third place, I would say that Queen has a slight edge, and Union is fourth. Union easily has the most boardings, but by default, these trips are all in the reverse peak direction.
Union Station's high ridership can be attributed to the reverse direction commuting of GO passengers. As such, connecting the DRL to Union would provide a relatively small benefit to existing TTC customers, and even less a benefit to those who actually do board at Union (GO riders) because their destinations are not accessible by DRL.
Even if one disregards the presence of the 501 streetcar, a Queen alignment still offers the greatest potential to offer existing TTC riders a chance to walk to their destination rather than transfer back onto the YUS. If the DRL also stopped at Queen and Bay, the heart of Bay St. would be about a 4 minute walk to a DRL station, as would City Hall and the Eaton Centre. And, since it's me writing this reply, I'll also add that with express trains, downtown could be only 4 stops from Pape.