>Fitting more and more smaller pixels on the same sensor doesn't improve anything at all (lower DR, lower low light perf

They improve sharpness if optics can resolve them. Also, having more data will might ease autofocus algorithms and computational photography techniques.

Low light and DR depend solely on the quantity of light falling on the sensor. That depends on scene illumination, sensor size and lens aperture,not on pixel size.

However, having a huge resolution is a waste of storage and processing power if the optics can resolve much of those pixels. And it could slow things down.