What happens if your spreadsheet has any of those problems? Surely it would be better to do all your calculations on paper ledgers or a chalkboard right? The real trouble is the sheer number of calculations we are imposed to manage. Why even use computers? Do they provide any benefit? Your car can break down. It must be better to walk. There are so many risks with online banking. Maybe we should recommend that people keep money in their mattresses. You can ask “what if” for any system and choose a method that suits you best.
I’m not here to champion the use of a password manager. You can read up on them and decide whether to use them or not. I was just looking for the maximum password length for this forum. Having secure passwords is good practice whether you use a password manager or not.
In response to your situations 1-4 above, password managers are specifically designed and built to protect the “keys to the castle.” It is the purpose of the software to protect and safeguard that data — to prevent access by others and ensure access by you. Security has been thought through, designed and tested. Thought has been given to a wide rangs of things that could happen, e.g. what happens if you die, and your spouse or whoever needs access to your passwords. Things have been thoroughly thought through. Digital security is always advancing and is based on sound mathematics. This forum is a spreadsheet forum. If you are a user here you know about math.
Protection of your data is handled much the same way as the regular backups etc. of the rest of your data. The passwords are synchronised between your devices over secure channels. Sure software can crash and companies can go out of business. Did you think there would be no way to get your data out or export it? And sure there are password managers with some problems, which is why you should read up on which password manager to use, just like you read up on which product of any kind to use.
There is a whole Internet full of data out there that you can access. I encourage you to read up on anything you have questions about. I’m just one person. If you want other opinions you can get the opinions of anyone else. Then, make your own decisions on which product to use, or whether to use such a product or not.