Fantastic analysis! I would just add that you need to give your relatively inexperienced GM and head coach some leeway to make mistakes and correct them. In Walters' case, he needs to enhance/replace the scouting staff.
In O'Shea's case, he needs to replace his OC and maybe more of his offensive staff. I think part of the problem with O'Shea has been his deference to his more experienced coordinators, but now that he himself has gained more experience, he should be more confident to pull the trigger on needed changes. I really do think that it's tweaks that we need, not wholesale changes. If you bring in a capable OC (and a left guard), the offense scores more points and stays on the field longer, which makes it easier to play defense, and all of a sudden, you have a playoff team.
O'Shea has his flaws, for sure, but there's something to be said for the fact that his players seem very loyal to him, and has created a fair amount of loyalty to the club (see the long-term extensions signed by players this season). That said, I would only give this regime one more year. If they can't improve next year, then it's time to move on.