Hamilton would have even more empty seats than Regina--plus FirstOntario needs to be replaced or significantly renovated if Hamilton is to ever host the Memorial Cup again. As it stands, by the time the OHL's turn comes back, without replacement, Hamilton will not be allowed to bid, as the arena is unsuitable for junior hockey due to being too large a facility and needing millions in renovations.
Whether progress is made on a new arena will determine if Staios gets more aggressive on selling off pieces in 2018/19 for hopes to be in contention for the Memorial Cup again when the OHL's turn comes back in 2020/21, as the Bulldogs project to be a mediocre team in 2018/19 with so much graduation and several players (Entwistle, Strome) in their final OHL seasons before they graduate to the AHL/NHL.
To the first point, I completely disagree and I don't even remotely understand your logic on that one. Hamilton was drawing 9,000 for the OHL finals, against the Soo who are literally the furthest OHL market from Hamilton. That number already is already more then Regina is capable of drawing, even if they were at capacity. So you mean to tell me, an even bigger championship series would have drawn less in Hamilton? That's even before you add in fans from across the country, and the fact Hamilton is within incredibly short driving distance from Jr. Hockey hotbeds in London, Kitchener and Niagara, is serviced by GO Transit to the entire GTA and is literally the 3rd best OHL market as far as travel distance to other teams is concerned (beaten only by Mississauga and Guelph). I think you had a recipe there for 1990 or 2007 all over again. Also consider this article.
Hosting fee causing high Memorial Cup ticket prices, low attendance | CBC Sports
Where they outright state, if we had more seating we could have lowered the price, which is the major deterrent for this game (as well as the fact Regina is one of the more isolated markets in the WHL, although not as bad as Portland, Prince George or Brandon). That said, I can respect the OHL's decision of not giving Hamilton the game. Being so new back into the league was enough of a reason, never mind the dehumidification or screen issues.
As far as the second, I don't think arena progress will have any determination on Staios's decision making. It's very clear that this is a heavy loaded run, and picks need to be replenished and that will need to happen at some point next year. When and who that entails is another discussion entirely. It's doubtful he'll have the players needed for a run until 2021, and given the OHL's next turn should in theory be 2020, that is far too soon to build a new arena and work out the kinks before hosting.
Staios is going to likely do what worked these past few years. Squeak into the playoffs and sell-off players to recoup draft picks, expectantly tank the next season (same as when the Bulldogs came to Hamilton), start putting the pieces together in year 3 and make another run in year 4 or 5.