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So does having to drive to work, sit in traffic, pay for and maintain the car (or more likely in the US, cars.)

I live in a city, share walls, and am less than a 10 minute walk from my office. My coworkers come in early and leave work late to avoid traffic. I'm home before they can get their car out of the parking garage and I can easily go home for lunch. I think my standard of living is therefore higher than someone who must drive to work.

That's your opinion, sharing a wall but being able to walk or bike easily to everything I need it a huge boost to my quality of life.

If you get lucky and get quiet and/or friendly neighbors, sure.

Sound isolation is part of the price/quality tradeoff. Urban housing is just so scarce relative to demand that almost no one can afford quality.

That's often true. I've also read about a lot of situations in rural areas where the nearest neighbor might be 1/2 mile away, but they are absolutely crazy about property lines.