I've never supported a eastward extension of the Sheppard line but the connection between Yonge and the Spadina ext makes logical sense.
Tis is not only for connectivity but also the reality that after the Spadina Line is open, Sheppard will become MUCH busier. Part of the reason it has not lived up to it's potential is that it reall is a Stubway. It's distance is too short and it really doesn't get you anywhere. As noted above it's more a drop off point for buses than a viable transit line but an extension to Spadina would greatly change that.
BurlOak........no apology for the graphic needed and I like your idea of interlining. People don't mind taking transit but they HATE transfers. The SRT/Kennedy bitch fest is proof of that. Riding SkyTrain to different areas of the city is a more pleasant experience due to interlining because it gets rid of a transfer and makes the trip that much more relaxing.
I would, however, add to you interling equation...........I would have a Sheppard interling with Spadina up to York U but only half the trains and the others I would have veer off at Finch and head west which could be done quite affordably using the Finch Hydro Corridor. A sort of Sheppard/Spadina/Finch Line.