I don't know if there is space for additional friends and family in it's current configuration, even if it was capped at 1-2 extras per person, that still has potential to be a lot of extra bodies in a congested space. Perhaps you'd need a separate area nearby that people could hang out with families but still have captains etc know where they are but again in the current configuration, I'm not sure where that would be.
I think there are lots of friends and family who come down, we were lucky enough to be by the fence so they could find us and we could pop out but we did have a pretty constant stream of visitors (local crew though).
I do think security is important though and while I don't bring super valuable stuff down there, it's nice to know you have somewhere you can leave things where they won't wander, the paddlers are generally pretty trustworthy. I've seen outside folk wander into our tent at another festival and help themselves to our food!
Perhaps a balance would be a relatively open village (some security keeping an eye out for things leaving with non-paddler-looking types) and perhaps some sort of manned gear check where you have an area with volunteers where you could check stuff like stereos for warm-up music/video cameras etc when you don't want to carry it but don't want to leave it in a semi-secure area sort of like the bag drop at running events. If you went that route there would also need to be somewhere nearby for people who came in on bikes to secure them.
