Very interesting discussion.
I think that one of the main problems is that the government (and many other people) seem to believe that all children ought to be moving upwards in terms of greater numbers going to university, gaining more academic qualifications etc. I think the emphasis is all wrong, and that this belief undervalues people who may never be academically brilliant, but have other skills which could be nurtured.
I do believe first of all that all children should learn the basics, such as reading, writing and maths, as well as having the opportunity for physical exercise in their school day.
What I think would be really great would be a comprehensive system with true flexibility. I.e. one where children were put into ability groups for all subjects, but were assessed regularly with the option of moving into a different group. In this way children who were not the most able when they started school, but who worked hard and did well would not be disadvantaged.
I also think there should be far more flexibility with the types of subjects/qualifications available. It strikes me that in most comprehensive schools most subjects offered are either the traditional academic ones, or the ones that people refer to as "soft options" e.g. media studies. There seem to be few courses available to secondary age children which would really suit those who are not academically gifted but are really good in a practical way. And I think that if children choose to do course which are more practical, it should not be seen as "less good" than those who choose academic options.
I think that this flexibility should also extend to higher education - so instead of trying to push as many people as possible through university, there should be more options (such as polytechnic type courses and aprenticeships) where students can follow a course that is really suited to their particular strengths.
I also think that fees for higher education should be paid for by the LEA as used to be the case. When I went to university I knew several students who were from poorer backgrounds. They were there because they were bright, and had supportive parents. But also because the LEA paid the tuition fees and a large part of their grant. I think those students would probably not go to university these days, as their parents couldn't have afforded the fees, and would have been unwilling to take out a loan for such a large amount of money.
With respect to the questions put in the OP, I feel that in many places there is no choice. I am lucky in that we live in catchment areas for reasonably good state schools (both primary and secondary), but they are always oversubscribed. If we lived in the catchment for poorer schools we would never get in to one of the better ones. The only choice is to move house (not an option for many people, as houses cost more in these areas, partly just because they are in a good catchment area!)
I feel that although our local primary school is good, we still do have to top up with anything "extra" such as music lessons etc - you just don't get those sort of things in any great quantity at a state school. Our son (aged 9) loves cricket, and we have taken him to some indoor training for that for the last 2 or 3 years. He also joined the local cricket club last summer and played in their under 9s team which he loved. He has recently been selected for the county under 10s squad, and we went to the first training session this week. It was very noticeable that every parent I spoke to said their child went to a private school - ds was the only one to go to a state primary. When I was chatting to one of the mums, she told me how much cricket her son plays at school - they are out playing nearly every day (from yr 3) and have proper teams and all the facilities. Whereas ds gets nothing at his school. In our case I think it has been worth it to take our ds for cricket training - but we couldn't have afforded to send him to a privates school.