Firstly - great post.

Secondly, I wont post all your reply here as I fear the length will break the site

There are different agreements that could be reached. It is clear the UK want to have a free trade agreement with the EU as they believe that economically it makes sense for the UK and more importantly the EU (who export more to the UK that we export to the EU). As we already have all the EU regulations embedded within our laws, this should be simple to achieve (if there is political will to do so in the EU). If this happened then the negatives around trade you mention would not be an issue.

With regards to immigration, it is agreed by everyone that immigration will continue. However, everyone would agree that the ability for a country to take in immigrants is inelastic (both politically but more importantly from a resources perspective - schools, housing and other resources as it takes time to put these in place). At the moment, we do not get to control the type of immigrants coming to the country from the EU. In the future, we will be in a position to allow immigration that better represents the skills the country actually requires - including Scotland. For example, we allow people from, for example, India to study engineering in the UK. At the moment, when these engineers graduate there is huge restrictions on who is allowed to stay in this country. Employers like Dyson are crying out for these skilled workers but are unable to hire them.

As the countries ability to take immigrants is inelastic, being able to better plan the sort of skills that are required in the country vs the current situation is far better from an economic perspective (politics aside).

If, however, we had to trade with the EU under WTO rules, the EU would not be allowed to "punish" the UK for leaving the EU. Also under WTO rules, there is both a commitment and responsibility on the EU (and all other members of the WTO) to reduce non-tariff barriers between the EU and other countries. This is a major point because as we are already members of the EU we do not have these non-tariff barriers (as a point of fact, there are non-tariff barriers to trade within the EU right now that affect the UK - such as the rules around calling sparkling wine Champagne only if it comes from a specific region in France or that cornish pasties can only be made in cornwall). The point is that the EU (and member countries) would not be allowed under WTO rules to put in place new non-tariff barriers.

Using WTO rules for trade has not stopped us doing more trade outside the EU than with the EU.

The London School of Economics study you mention was published when project fear was hitting its stride. As part of the article it states the reductions in GDP that were often stated before Brexit which have largely been discredited by events. It also completely fails to recognise that under WTO rules the EU (and its member states) would not be allowed to impose non-tariff barriers on the UK.

Personally, even though I propose it, I doubt that the Government will compensate for higher tariffs. I just used it as an example. Higher tariffs, running at a few percentage points, is completely wiped out by normal currency exchange rates going up and down. You are right, non-tariff barriers are far more important now. However, as I already state, it is not possible for the EU to impose new non-tariff barriers to trade against the UK under WTO rules. Their are far bigger problems with this outside of the EU in countries where we want free trade agreements such as in India and Africa, however, these problems exist whether we are in our out of the EU.

You also need to factor in the reduction in costs to businesses that do not trade with the EU. In the single market, all businesses need to meet all the EU regulations whether they trade with the EU or not. Moving forward, they will only need to do that if they trade with the EU, cutting their costs. Furthermore, businesses that trade out with the EU need to meet all the regulations of the countries they trade with anyway. We do more trade with non-EU countries than with EU countries - this expense does not stop trade from happening.

, not to mention we're now opting out of the current EU proposals to reduce non-tariff barriers to trade in services where we would have stood to gain a great deal in the coming years).
This is an important point. It is not widely recognised that we do not have a single market in the EU around services. This is because it is far, far more difficult to draw up trade agreements with respect to services. So hard, in fact, that the EU has failed to do so since its inception. It is much talked about, but in reality nothing has happened to create this "single market" around services. I do not therefore believe that in the short term this will impact on this specific discussion, however, it will also depend on the type of agreement we strike with the EU.

I find it difficult to believe that any fair-minded person would compare these two situations (the status quo and life under a hard Brexit) and conclude the latter is actually better for the economy just because we no longer have to pay a relatively small fee into the EU budget every year - incidentally, that wasn't simply lost money (as subsidies to businesses are) as it gave us a very large say over how the money was spent, what the rules of the single market are, the future direction of the EU, the trade agenda at the WTO (where we're now bit part players sitting on the sidelines while larger actors like the US and the EU make all of the decisions) and so on.
What I am comparing is whether trade with the EU will be affected so much for Scotland that it becomes a matter of leaving the UK. The total exports from Scotland to the EU is £12bn per year. This is the total figure - this is not the profit and this is not the tax that Scotland would earn from these exports. Even if we reduce trade with the EU by 20% as part of Brexit (something that I do not believe would happen) we would need to look at the impacts on the entire economy and tax income as a result (assuming that we do not make up this short fall in trade with the rest of the World from new free trade agreements) and compare this to what our deficit would be as an independent country. Even now, our current deficit as a country is nearly £15bn. The current deficit is a far greater issue for the economy post independence than any potential impacts of trade with the EU post Brexit. As an independent country we would need to substantially increase taxes and/or reduce services. There are also the added costs of separation to factor in and risks to the economy of the potential of losing companies such as financial services to other hubs.

There are risks with leaving the EU. All the guesstimates around the immediate impacts of leaving the EU have been wrong. There are also risks with leaving the UK - which is a far bigger market for Scotland's products than the EU. I concede that these risks are are up for debate because we have not left either the EU or the UK. However, what is not up for debate is the £15bn deficit that we currently have and would need to deal with post independence.

PS - I would much rather live in Spain, but it's just a Don Quixote reference.
cool username for a football forum!