We use Python too.
This system was originally put together in the 80s and while a complete reimplementation from scratch in Python is possible, it wouldn't really give us that many benefits that we don't already have. We don't have to worry about algorithms all that much - we may just write an SQL query which takes care of things for us. One of the more complex things we do in new code is maybe two levels of $order, the equivalent of your for x in y loop.
We're programming on a level quite a bit higher than C, nor are we exposed to the sheer verbosity of Java, thank god. You think Caché ObjectScript is awful? I think Java is awful.
What Caché gives us is tight integration between the language and the database system, so in that way the choice isn't really between Caché ObjectScript and Python, it's more between PL/pgsql or PL/Python and Caché ObjectScript. Once you go there you'll realise that the code that's written in ObjectScript isn't really affected that much by the choice of programming language anyway. And PL/Python isn't really something you'd want to write a production system in anyway. Between that and built-in ORM, things really aren't that bad.
And 100x readability improvement is just wrong. Sorry, it is. Sure, that may apply to some old MUMPS code that survived the 70s when disk space was sparse but even this is fairly straightforward to expand into something quite readable. We do have syntax highlighting, function calls look the same, and assigning a value to an object is 'set object.Property = "blah"' instead of 'object.Property = "blah"', a difference that's quite trivial.
That's not to say the lack of libraries isn't annoying, but everything really important is there in the right places. I've written a decompressor for tar.gz in about 34 quite readable lines, with error handling and all. gzip is built in these days so it's really mostly .tar I needed to worry about. Alternatively, calling out is just a matter of $zf(cmdLine, -1). Similarly, I've just put chosen (https://github.com/harvesthq/chosen) into our web application, based on Caché. It was easy enough to do.
And it's a pretty top-notch fast SQL implementation with a nice built-in language and a nice ORM and lots of other bonuses like full-text search and bitmap indices and OLAP cubes (yes, it speaks MDX even) if nothing else.