I'll take your points one at a time.
1. More games in the playoff season. Of course the NBA has more playoff games. And the reason is simple - that they allow half of the league to make the playoffs. As for the length of the season being different, that is simple - baseball can be played nearly everyday. But you never want to see an NBA team play for a couple of weeks straight - they never even play more than 2 days in a row. But the mere existence of more playoff games is not a guarantee that the playoffs are better in the NBA - for every upset there are 3 series that end yup being blowouts because you have a team that wins 60 - 65 games playing against a team that might be a .500 team or so. (Look at the last 2 seasons - both years saw 3 teams with a winning percentage of .500 or worse making the playoffs)
2. More underdogs can win. First off, the 1994 NBA champion Rockets were NOT a sixth seed. The 1995 team was. And in their case, they still had a winning record (47-35) Unfortunately, again, you could have a mediocre team simply getting lucky.
3. Make every team that deserves to be in the playoffs be in the playoffs. Sorry, but to me a .500 team does not deserve to be in the playoffs in any sport. The playoffs should be about the best teams, not simply the teams at .500 or better. Again, let's look at history here. If the top 8 teams from each league made the playoffs, the Al would have had the Indians playing in 2008 (as the eight seed) with a regular season of 81-81. So an incredibly average team would be in the playoffs. And in 2007 the Twins would have been in with a record of 79-83. And while perhaps you would see more people watching playoff games, you also might see a drop in regular season viewing. If a fan knows that his team has a 50 % chance of being in the playoffs, how much will he care about the regular season? Also - you need to think of the logistics. If you were to have 8 playoff series running at a time in baseball, maybe 5 games spread over 6 or 7 days apiece, you may have 8 games played on a single day. And you are going to be playing those games at a time when other sports are starting their season - the NFL will basically own Sunday afternoons, you will have college football being played on Saturday (and during the week as well), So how do you broadcast these games? Do you make an effort to have fans see as many as possible? Or is it more likely that you will have more regional games - in other words, you may have 6 games all being played at the same time, but the folks in Philadelphia might just get the Phillies game. So all you will actually be doing is splitting the audience into smaller segments. And do you really want to have your team's broadcast be relegated to the eighth slot? Do you want to go so far down in the talent pool as to have Fox or ESPN using their 8th best announcers on that game? Scary thought. And as far as I'm concerned, the only people that need to be concerned about ratings are network executives and advertisers. I personally don't care if the World Series has 20 million or 100 million viewers. Too many variables come into play with those things - what cities are represented, etc. To water down your playoffs simply to draw fans is not only silly, but may eventually result in lower ratings. People want to see the good teams playing in October, not the mediocre ones.
The reason for only 4 teams making the playoffs is simple - the regular season is considered more important in MLB than it is in the NBA. To allow average, and in some cases, below average teams to make the playoffs would diminish the importance of the regular season. Sports that have half the teams making the playoffs (not just the NBA - the NHL does it as well) are basically allowing teams to simply worry about surviving the regular season and then hoping to get hot at the right time.
I will agree with you on one point - it is a shame that a team may miss the playoffs because they are in a strong division. Maybe the leagues should go to a balanced schedule, eliminate the divisions, and just have the 4 best teams go into the playoffs. But the answer to that problem is not to reward teams for mediocrity. Having a sub .500 team in the playoffs is definitely not the solution to that particular problem.