It is my preferred option as a Facelift, since there is so much about the current format that works.
This is about designing places for people, who are drawn by shade & seating. It must be an attractive, comfortable "destination" no matter where one lives in oakville. Open George Street & part of Lakeshore for events to expand the public area when needed so that stages won't interfere with trees, grass, seating & capacity in the Square itself. Encourage shuttle buses/public transit to Downtown to ease need for parking or "car storage". Return Downtown to pedestrians, strrollers & those biking. No silver bullet to revive Downtown, but attractive "people places" are the best start.
Absolutely REAL grass is a keeper. My kids, now adults, loved playing there. Kids playing is great: they burn off energy outside while providing the entertainment for those watching from the seating!