I personally think the best places I've ever lived were areas where the housing stock is primarily three flats. You still have a lot of space, and you can find space to be alone when you want to be. The density enables a lot of amenities within walking distance, as well as making casually meeting neighbors easy. More densely populated neighborhoods have the lack of space you describe.

I moved to an area with a similar lot size, but all the houses are single family. It's borderline unwalkable, and it's still much more densely populated than the average suburb. The suburbs I think are the worst density imaginable. You are still close enough to other people to annoy one another, but not close enough to interact in a humanizing way. Most of your interactions will be only when someone intrudes into your bubble in some way.

I think there are a lot of benefits once you get up to a more rural density. You can have a shop, you have fresh air, and nature, etc.

The midpoint where you aren't stacked is the worst in my mind though.

The typical plan where I live is to have 3 or 4- story apartments in a square ring around a central yard. 100 years ago, that's where the pump, and the outhouse, and the pigs were located. Nowadays these are often play areas for the kids, small gardens, a BBQ area, and other ways to enjoy the outside while being isolated from the street noise and wind.

The building construction is quite solid. If we're making no noise, I can softly hear the piano upstairs playing. It's much nicer than the noise of the neighbors' lawnmowers when I lived in a house in the suburbs. My city has only about 60,000 people, so the noise even downtown isn't high. In the nearby big city of 500K people, buses, and trams, it's amazing how sound isolating triple-paned windows can be.

I think you're looking at solutions that are possible should one own a house, and missing that other solutions are possible with apartments.

In addition to the courtyard gardens, are also neighborhood plots, for those who are more serious into gardening. Many people who have a plot also have a little garden shed, with some furniture and such to make it sort of an escape from the house.

For a workshop, I joined the local maker's group, which is 4 blocks from where I live. They have a drill press, power saw, and other equipment for the rare times I need it.

There are also some lovely walking paths, the nearest dog park is 4 blocks the other way, and about 20 minute's walk away takes me to a part of the river set aside as a dog bathing area.

Of course if you want to keep a sled dog team, or do furniture building as a hobby, then your apartment options are limited. But for most people, being "stacked on top of each other" isn't a problem, and doesn't result in "much more stressful living."