Not an expert, but I think I'll try and give my amateur guess and speculations on the present transit plan.
I think they were planning to add lanes to the highway anyways in the long term. The LRT construction was just a good time to fast track it in order to deal with the closure of the transitway since it will open for car traffic in the future. If we continued to use the new lanes solely for buses odds are they would have to add another set of lanes to deal with increased car traffic in the long run anyways.
There is a trade-off with rail and buses. I'll admit rail is less flexible and cannot usually be rerouted, that is one downside. There are other major benefits which likely out weigh that particular issue though. For more obvious benefits rail can move more people per vehicle, generally provides a more comfortable ride, is more energy efficient and costs less for fuel/electricity to run and requires fewer drivers. In most occasions I would argue rail is probably more reliable and a bit safer even, for example since trains follow the rails there is a bit less risk of diver error causing accidents or collisions with other vehicles. In winter rail is not usually as negatively effected by bad weather as roads are. For example in winter the O Train continues to run on time when regular buses don't and doesn't usually need snow plowing while the transitway requires it as much as regular roads.
The immediate justification for LRT downtown at least is somewhat obvious, the downtown bottleneck. Aside from this being a choke point and a major slowdown in the system there is also the fact that the transitway downtown cannot physically fit more buses during peak periods. This is also one point where Andy Haydon's bus tunnel idea probably fails, because a bus tunnel probably won't provide a lot more physical space for the buses to operate and pick up passengers in than the existing transitway does. Buses would still have to stop at each downtown station so they can't just bypass each other even if you added separate lanes for pickup areas. LRT trains can fit more people per vehicle so LRT will help solve the issue.
For route planning I believe the city is trying to preserve as much of the existing transitway/rapid routes as possible. This is one reason why the city wants to keep LRT in the north end of the city. It preserves most of the existing ridership in the west end of the city core (with the green belt) and maintains transit for the employment and business hubs which are already used to the established system (like downtown, Tunneys etc).
The LRT itself is a hybrid of both local and commuter transit like the transitway already is, but with a bit more focus on commuters in the long term. The aim is to move people as fast as possible across the city (going east west) and to major employment/business hubs (ie again downtown). While commuters are the main focus in that respect, rapid transit in dense urban areas, or areas which can be developed as such are also a major goal. There is far less potential for dense development in the west end than the west end though. There are simply more open spaces like near the Ottawa Train station or ST Laurent in the east end. Building the western leg of LRT is more to complete the east west rail system within the greenbelt.
Hunt Club would be a very poor idea for most forms of rapid transit, especially a train and especially as a downtown feeder route. There is not very much there except the airport which would benefit from it directly. The few neighbourhoods directly on Hunt Club are very spread out and not very dense. A feeder system using the the O Train to get downtown probably adds more time onto a downtown trip compared to the existing transit system. Hunt Club is simply way too far south for this to be practical (traveling south for no reason seems rather redundant). The existing transitway in comparison goes mostly in a straight line to downtown from Kanata.
The only real reason for any type of rapid transit on Hunt Club I can see in the immediate future might be an express east-west crosstown bus route if more people were going directly across the city and bypassing downtown. (The bus would only stop at a small number of key spots instead of every local stop. It would be faster than the normal local routes kind of the like the current replacement bus route for the O Train while they are double tracking it). This has been suggested by a few people I've talked with or online news commenters as a potential way to alleviate stress on the transitway downtown, by allowing some east-west transitway riders to bypass downtown and reduce the number of buses required there. I have also heard people suggest using the highway or Baseline/Heron/Walkely/Innes for an express east-west route. The idea may have some merit but I am skeptical of it. I'm not entirely sure that there is a large enough percentage of the east-west transitway ridership that goes far enough beyond downtown to make this very practical (let alone people who would go all the way from say Orleans to Kanata). It would definitely require separated bus lanes to be practical during rush hour traffic so the express buses aren't slowed down. Long term it would probably only be a short term solution to the downtown bottleneck because ridership will continue to grow.
For a southern alternative to the transitway the city is planning to run buses from Barrhaven via Leitrim once the Stranherd Bridge is complete and an eventual extension of rail to Riverside South is in the Transit Masterplan.
In defense of the Richmond LRT route it may actually be better in terms of urban density compared to some other potential east west routes, even with the river and parkway to the north cutting off the catchment area. I don't have exact population or density statistics but most of the homes in neighbourhoods further south are usually the post 1950s style suburbs which have larger spaced out homes and have very low density.