Whether they show up in force or not, the games are supposed to be played first, for the enjoyment of students attending the university, who are paying through the nose for the privilege, at today's tuition rates. I agree with most of your post, but I think the proposal to further punish the students for showing up late to games isn't right.
The general admission seating for students is obviously a foolish idea and a failure. Students will show up when they want to show up. Period. No amount of donuts is going to make them line up like children at disneyland for the opportunity to see Michigan play Akron at closer range, especially at noon on a Saturday.
Cutting back the student section defeats one of the major purposes of having football, which is ostensibly to increase the attraction of the University to prospective students. Telling students, "We're going to make it more difficult for you to attend because you're not being very good football fans" makes very little sense to me.
Punishment thinking doesn't work well for 18-22 year olds, and today's GA seating showed that quite well.