I'm more interested in the first part so I'll respond to that.
For the very first point, it's true that if the politician convinces only 51% of the population, a large part of the same population is screwed, but there's two problems with that argument. Firstly, this is a generally unlikely scenario; it's unlikely for a politician to get such a weak majority (except in cases like the US and that's actually because they have a rather bad democracy).
More importantly, though, even if only 51% of the population is satisfied, as you, yourself, mentioned, in the absence of democracy and the presence of a "vote with your wallet" system, only the rich will be satisfied. For the most part, wealth, in any kind of nation, tends to be concentrated in a hell lot fewer than 51% of people, which means that, with democracy, even though not everyone's happy, more people are likely to be happy.
As for lobbyists, in real life, there are a lot of successful democracies in the world where lobbyists don't have significant influence over the government. Sure, the US doesn't, but I'd say that's more the fault of specific circumstances in the US than an inherent flaw in democracy.
For your second example, I tend to agree. In general, larger scale governments are able to offer more governmental services than smaller ones (ex: four people can't arrange for a fair and unbiased court of law, but an entire city can do it easily), especially with stuff like economies of scale and mass production, but I think, with the comparatively enormous wealth of most individual cities in modern times, the benefits brought by increased accountability would easily trump all of this.
“These are my principles; if you don’t like them, I have others.” – Groucho Marx
