That would be a step in the right direction. Market Street looks like a flexible street where the bollards could be collapsed and the whole street could be pedestrianized at certain times of the week and year, but is it actually meant to be used that way?
Front Street is often empty on the weekends and outside of rush hour. Making it into a market square on the weekends could work beautifully with a pavement of durable granite pavers, which could still accommodate vehicular traffic during weekdays. A lot of the traffic is just induced demand and made up of people that don't even need to be driving.
The economic potential of a market square could also be huge by bringing more people to the area outside of peak hours and having an amazing public space for concerts and events. We should be treating our old town like an old town and prioritize pedestrians, culture, and economic vitality there.