I am not sure if you can turn this into a Rapid transit corridor. There are 15 intersections between the Don Mills portal and the Kennedy portal - that is a spacing of about 350m. I doubt that signal priority is possible with so many, and so close intersections, especially at the train frequency needed to be a rapid transit line. Crossing gates and signal priority could work if intersections were a kilometre of more apart. In order to go over an intersection, the track would have clear the roadway by about 5.5m, plus about 2.5m for the structure to support the tracks. If you want to go under an intersection you again need about 5m clearance for the LRT, 0.5 to 1.0m for the "tunnel" structure, and 2 or 3m for services and utilities under the cross road. In order to get the track to go from horizontal to 8m (above or below) would need about 150m at 4% grade, plus 75m for the vertical curve (transition from level to inclined or inclined to level). Plus add in a 100m station and this means that the elevated portion for one crossing would require about 0.7 km. It also means that if you go over Vic Park, you can not come down before Pharmacy. This means that it would have to go over both and be over 1 km long.
Thus, I think the only options are to keep it the way it is designed or have it fully elevated.
If left as is, then ECLRT will not have enough capacity to carry many, and all of Scarborough (aside from Agincourt) will be funnelled onto the B-D subway. This means that:
1) There would be a significantly higher number of passengers arriving at Yonge-Bloor and the DRL would have to solely be required to get as many riders as possible. This could only be accomplished if there were no intermediate stations and the DRL ran express from Pape to the Financial District. (Pape and the Downtown station would have to be designed for huge passenger volumes).
2) There would be significantly fewer passengers passing Don Mills and Eglinton, and a DRL extension to Eglinton would not be required.
If the ECLRT were elevated, passengers would be better distributed between the two lines. This would mean
1) The demand on the DRL to solely relieve Yonge-Bloor would not be as great, and the line could have additional stations downtown.
2) Pape station would not require nearly the capacity and could be more easily built without massive construction.
3) The demand at Don Mills and Eglinton would be higher and an extension of the DRL to Eglinton would be justified.
So I think it is possible for ECLRT to be in the median, but it will have a great effect on the rest of the network.
