Station overcrowding can be fixed. Stuff that never gets built because it's too expensive can't. It's important to not let perfect be the enemy of the good, no more so than public infrastructure.
Yeah, usually by totally rebuilding the station. Easier said than done when you already have a skyscraper built over top of you. NYC is trying to revamp a lot of its current stations that see magnitudes of traffic more than they were designed to on a daily basis, and that's a massive undertaking.
The 7 is already projected to run at peak frequencies in the existing plan; signal upgrades help a bit but not a lot at a terminal station. The rest of the 7 isn't capable of running trains much more often.
the 7 train only runs at 24 trains per hour. Other systems, even ones in the US, run upwards of 30 trains per hour. For example, the Red Line in Chicago runs every two minutes during rush hour and that is capped due to the Belmont junction. It has the same terminal station layout at 95th street as Hudson Yards.
For 2.5 billion dollars, I bet they could have extended the system, not built some insane labyrinth 150 feet underground and improved signaling to run 30 trains per hour and maybe even built that 2nd station they had to cut due to cost.
The NYC Subway had a yearly ridership of over 2 billion in 1946, higher than it is today (pre-covid). One could say that we should be building a subway that can transport 5 billion riders per year and have six tracks on every line but that would be silly and there's no legitimate reason why that would be the case.
