I have four comments regarding this. They're not necessarily meant as direct rebuttals to you, as you bring up some good points ... I just like talking about this stuff, haha.
1) I find it odd that we are acting like this is some radical idea. The students were in East Main for W-A-Y longer than they have been in the NEZ, and the DIA found a way to make it work economically during years where we were frankly drawing way fewer fans than we are now, not to mention getting SO much less money from the Big Ten distributions. The radical idea was RG moving them to the NEZ in the first place. So, I am so incredibly skeptical that it's just some financial impossibility. This attitude also assumes that there is no long-term financial gain from dramatically improving the gameday atmosphere ... a short-term cost of lost revenue in literally two sections of the stadium could very well be outweighed by the future gains from more victories at home because of a better environment, more casual fans starting to think of GMS as an elite atmosphere that they want to visit once per year regardless of how good we are, one extra difference-maker recruit per year being impressed with our fan support and it potentially being the tie breaker between us and someone else, etc. I mean, guys, imagine if Orange Krush had always been up in C Section for the last 30+ years ... how much pushback would we get that we simply can't give up such good, revenue-earning seats and give them to college kids?? Thankfully we decided not to think that way a long time ago, but if the decision were being made today, there would no doubt be a lot of opposition, and I would argue that it would be short sighted.
2) We really aren't talking about that many seats, and I will be referencing the map below. IIRC, the NEZ (132-137) seats like 5.5K or something like that. Let's just assume for a moment that is true, and we need to find 5K seats elsewhere. Per Wikipedia, East Main seats 18K, so I am assuming each section (101-109) seats 2K each. Let's start with 109, as the fact that visiting fans are still taking up 109 is nothing short of negligence on the part of the DIA, and they should feel ashamed for such a dumb placement. That is a literally FREE section to work with. Let's act like a big boy program and move the visiting fans to 201 or 209 where they belong, and we have now found a home for 2K of our 5.5K students ... 3.5K to go. 104-106 are the only sections in East Main that are marked as "prime" seating, so I will assume we don't want students there ... and that's fine! However, even just giving the students 108 (i.e., right next to 109 to now have a 2-section student section in East Main) gets us up to 4K out of our 5.5K students. Ideally, we would just give them 107, as well, but let's say we absolutely cannot ... we only have 1.5K seats we need to find, so put some in the 110-111 corners of the Horseshoe or up in 207-208 in the East Balcony to pin the visiting fans between a rowdy student section and a brick wall. This just is NOT that hard ... the DIA is just being complacent and unimaginative.
3) The issue really shouldn't be giving the students prime seating or not ... hardly anywhere gives them the best seats, and plenty of awesome student sections are behind one end zone! The issue is that at our stadium, both end zone seating areas are not in any way, shape or form "on top of the field," and any student section that isn't going to absolutely and totally suck needs to be right on top of the players. If the NEZ structure had been built at field level at a super steep incline, it would be a perfectly fine place for the students! Instead, it's like 30 frickin' feet up in the air and extending back at a gradual angle, making them feel even more removed from the action. We don't need to discuss the Horseshoe's issues, being ten miles from the end zone, lol. I would love to put the students in whatever structure we build in the SEZ, but I am sure people will think that is financially unrealistic, too, as they'll want to make money on those brand new seats. I think an ideal scenario is a "wall" of students in the middle of the new SEZ stands, with luxury suites above them and revenue-generating (perhaps actual seats and not bleachers??) on either side of them.
4) I think part of the problem with students leaving early might BE the NEZ itself. As others pointed out, it is the most sun-drenched area of the stadium, and it feels cutoff from the rest of the stands. If students felt like they were a part of the same rowdy crowd as all 61K of us, it might seem more fun. I've never sat in the NEZ, so I am only guessing here.