Re Nintendo targeting the younger age group, note that they recently signed Capcom to an exclusive for the Resident Evil series so they are making some attempts to expand the audience.
As for DreamCast development your post does proves you don't understand product development. The sports titles already ran on PowerVR cards on PC which is the graphics card used in DreamCast. I've already written how cheaply they could have ported the sports titles and they could have grossed another $300m easily (3m units across all products times two years) with an outlay of just $10m for development ($1.5m per product per year) and maybe another $5m to $10m for marketing. And that still wouldn't have deflected internal development focus from PS2, XBox or GameCube. So how is missing out on $280m gross profit fiscally responsible?