You make good points. One thing that I'd like to add is while Nebraska is in the smallest populated state they are also the only major D1 football program in their state. They really don't compete with anyone else for in-state recruits, they automatically land all the best recruits in their state and many of them come out of their 2 biggest metro areas (Lincoln and Omaha). Within 50 miles of their campus they have a population base over over 1.5 million to recruit from. In comparison here in Iowa, the 2nd smallest populated state, there are 2 power 5 conference teams. On their current roster 26 of their players are from Lincoln and Omaha, 69 players are from Nebraska.
Now I'm not going to say that's why they were so successful all those years, Nebraska alone doesn't produce enough D1 football talent, they recruit from all over but it's certainly helped. The fact that 69 of their players on the roster today are in-state recruits might be part of the problem as they are not getting as many recruits from out of state anymore. But every year when they fill out their recruiting class they start with all the top talent within their own state, I think that's an advantage.