This is an awful lot of words to expend to notice that

(1) Social interactions need to be modeled in a game-theoretic setting, not straightforward expected payoff

(2) Distributions of expected values matter. (Hint: p(N) = 1/N is a really bad model as it doesn't converge).

(3) Utility functions are neither linear nor symmetric. (Hint: extinction is not symmetric with doubling the population.)

(4) We don't actually have an agreed-upon utility function anyway; big numbers plus a not-well-agreed-on fuzzy notion is a great way to produce counterintuitive results. The details don't really matter; as fuzzy approaches infinity, you get nonintuitiveness.

It's much more valuable to address some of these imperfections in the setup of the problem than continuing to wade through the logic with bad assumptions in hand.