Re: What type of environment do older kids thrive in?
We live in the city. We love the diversity and the fact that dd is exposed to tons of different cultures, ethnic groups, languages, etc. We love the amazing cultural opportunities, the theater, music, art, etc. (How many 5-year-olds get to take drawing classes in the galleries of one of the most famous museums in the world?) We love that dd gets so much exercise just by walking places, i.e., that exercise is just part of her daily routine. We love going to the many playgrounds nearby and meeting new friends. There are kids everywhere; we live in a big apartment building that's full of them. On rare snow days, we don't have to leave the building to have a playdate and on Halloween we can go trick-or-treating to 100 apartments in an hour. There's never any need to search for things to do, because there are a million things within a ten-block-radius the minute you step outside.
From an environmental and economic perspective, we love that we don't own a car and will never need to and that our carbon footprint is significantly smaller living in a modest apartment than it was living in a house.
We spent two years living in a nice suburb and absolutely hated it. I found it totally annoying to have to get in the car and drive to get a gallon of a milk or a forgotten item in a recipe, instead of being able to just run downstairs and get it at the corner store. I loathed the homogeneity and the keeping-up-with-the-Joneses attitude I saw in a lot of people. We had a backyard, but dd always preferred going to the park/playground anyway.
All that said, this is so much about personal preference. Different kids (and adults) thrive in different environments, and some kids will do well in any environment.