Some of the obstacles may be as follows;
Multiple owners of the various parcels. Of the parcels on either side of the E/W narrow there are 7 different owners. The former DV8 and the Arrow Press Square building have different owners.
Getting 100 S building owners to embrace a second retail front on Arrow Press Alley(that's not the actual name I just named it that) while still allowing for deliveries to their buildings.
There is currently a building on the south end of Dinwoody Plaza, that would need to be removed, in order to allow for a corridor to connect to Main St.
Getting pedestrian access to Main St through the Zions Bank owned parking lot.
The positives:
The City owns Dinwoody Plaza and I'm sure would welcome a better connection to the Plaza.
There is plenty of space to accommodate multiple pedestrian walkways.
To make it welcoming and viable, there would need to be plenty of lighting in the corridors, clean site lines and residential and retail access from the corridors.
Maybe something along these lines.
Red = existing building
Blue = new construction
Purple = pedestrian corridors.
Obviously it would have to be incorporated into whatever is eventually developed on the Zions Bank parking lot, including one connection to Main St and one to 100 S.