That's a reasonable structure (though I don't know if you need new names and branding).
It's hard to conceive of how such an agency would be properly funded, is the real thing. It's easy to say "provincial and municipal" but that's very vague. I think you probably need a baseline of funding from the provincial general revenue, obviously + farebox and then it's kind of a mystery. You almost certainly need road pricing and/or other revenue tools that feed directly - and only - into the agency. I think that's fundamental. How municipalities pay in is another matter but there can be some sort of formula for that.
I'd consider a Peel transit merger if someone could guarantee that 53 "Kennedy" service levels were more likely to increase to 7 "Kennedy" levels as opposed to it going the other way. ....as an example.
What I would like to see is the establishment of a baseline standard for service (i.e. "route Type A must have a frequency no greater than X per hour during peak periods, and Y per hour outside of peak periods, with a service span no less than X AM to Y PM") that would be followed across the board. This would be funded by the Province through some sort of a dedicated income tax levy in the GTHA for transit.
If a municipality wanted certain routes that operate within its borders to go above that minimum service level for that route type, it could opt to provide additional funding that Metrolinx sub-agency, who would in turn use that money to increase service levels. That would be funded from municipal property taxes.
So in theory, a municipality could offer zero tax dollars to Metrolinx and still receive base level service. However, if they see transit as a priority, they could pony up the dough to increase service to a level they would like to see for their residents. So with your example TOareaFan, Brampton could say "The base level service on this route is 30 mins, but we would like to improve it to every 15 minutes. Metrolinx, how much would it cost to do that?"
Totally. With Superlinx, I foresee 905 communities immediately complaining that they don’t get service as good as Toronto. Then funding will be diverted away from Toronto to support 905 transit. Given that the vast majority of trips are in Toronto, this would have a net negative impact on transit services.
To address your point, under the model I propose above it would be Toronto taxpayers alone shouldering the 'extra burden' of having greater-than-base frequencies. If only the base level of service is covered by the Province, then everything on top of that is up to the municipality.