Re: first tier cable rights, advertising revenue, ect: that's a lot harder to calculate, especially as a layperson. It's easy to Google state populations and cable subscription prices, though.
Otherwise, point by point...
Yes, the quantity of good games will increase (ND alone would do this, and we'd add a GT/UGA rivalry that I'm assuming gets high ratings). The "off hours" programming would also increase, since they'd be looking at filling twenty-four hours with sixteen subjects instead of twelve.
If I had to pick an expansion scenario, mine would be Pitt and ND. If the current Big Ten plus ND can't lock up basic cable subscriptions in NYC, I honestly doubt it could ever happen, as I don't think Syracuse/Rutgers/UConn (or even all three) would help too much. I could be wrong, that's just an MGoUser's opinion.
Quite frankly, I don't see the conference going anywhere. For now, they have a stranglehold on the number three media market, plus Detroit, Minneapolis, and the states of Ohio and PA. The football product won't be going anywhere, with huge and perpetual demand, and an improving basketball product, plus a new product in hockey. That won't keep the lights on, but it's sure going to beat them playing a rerun of the 2008 Rose Bowl for the umpteenth time. Like you say, there are risks going to sixteen, or even fourteen. I can't see the upside unless the SEC starts really murdering us in terms of dollars and exposure. The SEC Network is probably a ways off of catching the BTN, let alone drinking the Big Ten's milkshake.