Regarding just your proposal, I think it's a good one that makes more sense than keeping if for the reasons we currently are. I like your 5% number as well. The increase to rewards wouldn't be insignificant which seems to be a big growth driver...
The security could be addressed by holding the Steem in the "savings" portion of our wallets. It has a couple day window before it can be withdrawn which would give people some time to notice their wallet being hacked before it is too late.
yup there should be fairly elegant solutions
you can for example, even allow people to set the delay in the 'savings' vault
But I think the core issue is getting our incentives correct and a development fund is a step in the right direction. Hopefully development speed picks up as they feel more comfortable using their funds knowing the community is behind them.