It's obvious from the posts here that most of you are unfamiliar with air shows, air demonstration rules, military aviation, etc.
First off, it's normal to fly a "few hundred feet" over an obstacle. Transport Canada normally only requires an aircraft to normally fly only 500 feet over the height of known obstacles within 2 miles of the aircraft. Military pilots, trained in low level flying routinely train for 200 feet off the ground. Though, they generally avoid such low flying in urban areas so as not to scare the crap out of the locals. If you want to see close, find a Hornet low level navigation training route in the Rockies.
Next, for the manouvering you observe. It's unlikely that you'll see any aircraft doing loops over populated areas. That's all done over the water or over strictly defined (usually unpopulated) areas such as airport runways, parking lots or parade grounds. However, for most military operators, formation flying and steep turns (or steep for a civvy pilot) are normal operating procedure. In fact, military aircraft often depart, fly a mission, and land in formation. The pilots are trained to do that and often actually prefer operating that way. It's normal operating procedure and not considered risky in the aviation business (compared to say certain air show aerobatics). Military aviators who use formations to combat threats as a group would hardly find formation flying over an urban area to be challenging. In fact, I dare say most would not notice any difference.
Urbandreamer's picture of the Hornet doing a 60 and 2 (60 degrees bank and 2G level turn) is a perfectly normal and safe manouver for a military aircraft. In fact, they do it right before they land. Indeed, till they closed Downsview, it was not uncommon to have military fighters do just such manoeuvers over the city if they used Downsview as a transit airfield. And again, where were the complaints when fully armed CF-18s were performing just such manouvers over the city after 9/11. Did anybody notice then?Such moves may seem extreme for a civvy (it would be like a roller coaster turn 30-60 seconds before an airplane touced down) but it's normal for military aircraft. Now if you saw a Cessna or a Westjet aircraft do that over downtown then you should be worried.
Beyond that air shows and air demonstrations often write strict operating procedures for the show that define ingress and egress routes, marshalling areas, diversion routes and airports, emergency operating areas, etc. All of these are first and foremost to ensure the safety of those on the ground, and next of the air crew operating in a tight airspace. I am generally far more concerned about the crowd of traffic choppers that operate during rush hours in Toronto. Their unscripted manouvering bothers me a lot more.
The Toronto airshow remains one of the safest around. So relax and enjoy it.