I think private messages will be very helpful for those of us who are here for the right reasons. Personally, I err on the side of caution so I can be sure I'm not reporting without cause. I only report blatant violations, such as underage (under 13--they aren't allowed to ask or answer in the first place) users asking sexual questions, racism, bigotry, or any other form of hatred. I don't bother reporting minor infractions, such as chatting.
I don't think it'll matter a bit to the trolls who report just because they can. Even when their accounts get suspended for falsely reporting, they just open another account and get back to business. I think the best way to stop that is to not allow reporting until level 3. It takes a while to get to that level, so that would hinder trolls who open new accounts every day.