You put a lot of work into the OP and it's well written but I disagree with most if not all of it.
The part about arcades making money was pretty spot on but console games were often super hard so you couldn't just rent them and beat them in a weekend, as well. Especially in the NES era. When Sonic came out, he was just fast and cool with great graphics. Kinda pushed the limits with every new game (during the 16 bit era, at least). Never felt arcadey to me, though.