I think its naive to assume that people cannot be truly happy unless they are orthodox (pick your sect). Any lifestyle choice you make excludes something else. As an orthodox Jew, I choose to forgo a lot of things to remain observant, but that doesnt mean I am not missing out. I am just choosing a different path.
Here is a (stupid) example: My boss put me on an emergency job just before Yom Kippur. It meant working 16 hour days/7 days a week. Of course, I couldnt work on Shabbos, Yom Kippur or Succos. My coworker was working all 7 days and 16 hours each day. While he was struggling and exhausted, I used those days to rest up. So while yes, sometimes keeping Shabbos means restrictions, it also means much more.
About modern orthodoxy: Chalish, I think you must not have much experience with modern orthodox people. I think Itzik said it best. I went to a MO high school, and I would say 95% of the girls now cover their hair (if they are married). Of those 95%, I would say maybe 20% of their mothers cover their hair. Its a different generation.
I am personally modern orthodox. I dont believe in cutting out the outside world for no reason. To me, television is not a problem – its what I choose to watch that is. I like watching sports on TV, or the history channel…not everything has women improperly dressed. Same thing with the internet – I can self screen. I choose what is right for me and what is not. I dont need someone else (like yeshivanet or anything like that) to tell me otherwise. I will teach my son to do the same, just as I teach him to keep kosher and shabbos and everything else. I think personal responsibility is very important.