TeX is actually a fairly special purpose typsetting system. It does what it does well, but there isn't a large enough need for something better. "When he designed TeX, Donald Knuth did not believe that a single typesetting system would fit everyone's needs" (wikipedia)
Most of the "newer" systems build guis and extend TeX, which I believe is the right approach.
There are very good reasons for the 'issues' you are facing, so if you want to propose that it be done differently please research those reasons first.
Second, you yourself indicate that TeX is great except for a few minor quibbles. Knuth built it expressly knowing that it wouldn't be suitable for all uses and all people, but he released the source code and built an extension API so that anyone could adapt it for their needs.
You have all the tools you need to make the changes you propose, and it will be far easier to update TeX than to start from scratch, or even adapt any other system. Truly, nothing comes close to TeX. That's not to say that it's the best, but merely to drive home the point that it would be a monumental effort to implement all the good things you mention and somehow overcome the bad (although by the time you get to the bad you may better understand why it exists).
Regardless, I hope you pursue this, even as an advocate, and get others interested in it. It would be great to see take up of TeX in other fields, but that does require modification and update for ease of use and a better support of other technical entities than mathematical equations.
-Adam