The vision clarifies a lot and personally I’m totally alright with it, although not being particularly active these days.
In essence you want Lhavit to be a well-rounded city where normal people of a medievalesque time live their lives. They are working with low fantasy jobs with a great amount of realism to them within the setting, which means very many are farmers or farmhands, a minority are crafters or working with intellectual/administrative/religious/service/entertainment jobs.
If I understand it right, magic follows the normal rules of the magic system in Mizahar. The stance to magic in Lhavit is that it’s not evil as such, as for Lhavit it was once upon a time a positive thing used to save them after the Valterran. But they also saw the wizards of the time die in droves from overgiving and it was clear that a city couldn’t be built, grown and kept working on magic; Zintila saw this too and gave them the skyglass, and Caiyha gave them the okomos to make the transportations easier. This replaced the over-use of magic. After this experience in the past, magic is known to be powerful but also come with high risks. The tower mages keep their secrets and other people who practice magic in Lhavit are supposed to do it in private and with great self-discipline. Nobody works as wizard as a job nowadays; if magic is used it’s “like chili, a spice, but never the whole main dish”.
I like the idea of safety as it's tiresome when high-powered battle characters and miracle-mages is a must to survive in a city. If there's a lot of cartoony murderers for the sake of it sneaking around to "add tension" with roleplay that revolves around killing others, this shuts out characters which aren't about high-powered PvP. That narrows down the roleplay to a few topics people must write about if they want a chance, and there can be powerplay too. Once in a while a whole PC concept is just about powerplay and "domination" of "the weak". So. Let them, but those who want high risk roleplay can write it in the wilds, or they can be criminal in a safe city, but the risk is then on themselves and not on others.
I’m personally neutral to festivals. Tea-houses and stuff can perhaps be nice. I hope the exaggerated modern time “mass tourism”, shopping, and mass production can be weeded out, as the city is only 9000 people, most of them peasants, and wealth is rare. Shinyama and the shinya monks who can be seen patrolling the city and keeping it safe is an essential presence in Lhavit.