When it comes to cycling, a network is only as good as its weakest link. Seville had an eleven fold increase in cycling by 'simply' installing protected cycle lanes. http://www.theguardian.com/cities/2015/jan/28/seville-cyclin... The golden rule is to segregate. Give cars, bicycles, and feet their own space. DO NOT mix. If somebody can make a choice to put their 6 year old child on a bike and cycle around a city, you…
Also "mix everything" is a viable option, too, if people behave themselves. The "woonerf" (http://en.m.wikipedia.org/wiki/Woonerf) is a very good solution for densely built neighborhoods (even in the USA, it seems: http://ithacavoice.com/2015/04/ithaca-housing-project-includ....
In a similar fashion, I see little wrong with cyclists driving on sidewalks. Problems only start when they drive faster than pedestrians in a busy street. In other words: if they do not acknowledge that they are guests on the sidewalk.
That is fairly typical behaviour in the Netherlands. People will cycle through almost empty pedestrian-only zones at 10-15 km/hour, slow down to walking speed when coming close to pedestrians, and start walking, bike in hand, if things get really busy. Legal? Not everywhere, but this rarely gets you a fine.