The game is definitely alive, with SE boasting a number of 2million char-ingame achievement recently ( read : 2m CHARACTERS, not accounts ), but the game servers are far from empty, you will still see busy towns where people running here and there and don't even walk near Auction House in Whitegate with a slower computer system, it's so crowded your fps might drop to 1-2 ^^;
Started 4-5 years back, rested 1 year and just resumed back recently, getting into 2nd month and loving it back all over again!
All in all, once you get the hang of this game, the epic Boss fights, storylines, missions will be one you keep and remember for a long time. Though I'm not denying the fact that for new starters, it will be a very hard and long battle towards your first character/job to Level 75 ( Missions, stupid airship pass, Genkai 1, 2, 3.. Maat fights etc etc ), so a word of advice to newstarters, MAKE FRIENDS the first moment you logon, or join a Linkshell you will need them! ). But one thing is the FFXI is the most helpful game community I'm aware of (and I've played enough MMOs to conclude that), as it's built around helping one another, and you'd be amazed people are very eager to help you in this game, as to how they received help when they first started.
As for End-game LSes, I would say do not worry about it. Usually only lv75s are accepted, and the game has a steep learning curve, and you won't get to 75 without proper understanding of your job and to perform well in it. So BY the time you reach 75, your question would've been answered ^^, and that is all it takes to be well accepted in End-game LSes, a person who knows their job well.
There's a scary fact that will freak new players that u omitted. You've got to be a no lifer or be somewhere around there.
New players who attempts to challange the game because of the fancy clips from youtube will learn the truth behind the pimped players that had survive long in the game.
It's strickly a hardcore game and not even close or near casual. It's only casual for old players who is well pimped.
Mission isnt the issue in ffxi but economy is.
Want to know how hard is this game, check out pandemonium warden. Check the hrs that lately a grp of players defeated it. So far only 1 ls manage to take it down.