1) I believe so. Once Google goes into Diridon, enough young people would gather around the station, businesses would also gather, higher-density buildings will go up, start ups will start to gather as well.

2) Cupertino is close enough to Stanford and Moffett, which were the two centers of initial Silicon Valley. Morgan Hill and Brentwood are quite far. Still, its population and real estate markets will grow.

3) High price sometimes attracts people by itself.