Spadina Station. Can the station handle and increased load of people.
That's a good question. I suppose that most of the increase in ridership would be people who would otherwise be transferring at St. George to go southbound on University. So I guess it's really just a question of where would you rather have the congestion. By no means should this be a replacement for the DRL, but I think it would be quite effective as a 'local supplement' to it.
I also think that this type of route could give rise to an interesting local reference. Chicago for example has "The Loop" and "The South Loop", both of which are reference to the L loop in downtown Chicago. The Toronto version could be "The U", which would reference everything from Union to Bloor between Yonge and University, and "The Belt", which would reference everything from Spadina to the Lake to Parliament to Bloor. I think the phrase "inside the Belt" could become useful, seeing as how we have no real definition of what constitutes "the downtown area". By bounding it on 3 sides by an LRT line, it gives "downtown" a consistent and useful frame of reference. Just a thought.