Well, as it happens, I wrote my Master's project on how to convert the Transitway to light rail. I even got an award for it
There are definitely a few ways to minimize conversion disruption, both its extent and its duration, that the City isn't considering. In particular, it would be possible to maintain peak direction bus traffic on the Transitway for quite some time, perhaps even for the entire duration.
On the tunnelling issue, from my perspective no party in this comes off smelling roses. The local NIMBYs are backed up by the NCC on this one, unfortunately. But then the City largely opened the door on this tunnelling nonsense by (1) proposing to tunnel the line under Richmond further west and (2) dogmatically insisting on complete grade separation of what is supposedly a "light" rail line. The NCC can quite properly ask "why is it so important to bury this line under Richmond rather than having it occupy an old tramway corridor but not bury it on NCC lands?". The NCC could be forgiven for coming to the conclusion that the City regards City-owned lands as being more important than NCC-owned lands. Furthermore, the insistence on complete grade separation means that the line becomes a barrier to pedestrians if at grade, so where Calgary or Edmonton would just slap down a few pedestrian crossing gates and call it a day, here we have to argue over how many and where pricey pedestrian overpasses would go, and what they would look like, and on and on it goes.
Hobbs, unfortunately, didn't challenge the City's transportation planning engineers on either of these counts, and she herself acquiesced to NIMBYs on the Richmond tunnelling issue despite the fact that precious few people in her ward would even be affected (the ward border is like 200 m from where the line would enter the Richmond corridor, and they're all renters or condo dwellers to boot).