I actually think adding another subway line at Union would be not the best thing - in my opinion you want to spread out the points of transfer between subways to more stations. Union already has a lot of lines (yes most of them are GO), they have Via (less of an issue), and they have the subway, during peak times adding another subway will just make it too much at one location (again in my humble opinion).
Number two, the subway with future development plans in mind. The subway would not open for at least several years, it will be used in 5, 10, 20 years BUT not today - so future development plans should be a big factor in development of a subway.
We have taken the assumption that the east route and the west route are the same DRL line, they of course do not need to be, the west one could terminate at Yonge, and the east one could terminate at University. For example - you could have the west come down Adelaide, and the east come down south through St. Lawrence Market (I don't remember much north of that location being developed at this point). In the future, you could actually take the west line and terminate it at some place like Parliament (slightly east) -- i.e. intersecting the west line.
You could also take the east line, and turn it south at around Union and run it down to a station on the waterfront and have a station with the LRT line not having to turn north into Union Station. Of course much farther in the future it could then curve west again if the LRT gets overloaded.
Just some thinking outside of the box. Would splitting the west and east lines be an option?