kk, I will avoid quoting your post from two reasons, one is that post would be too long and other reason is that sadly I must agree with most of it. You clearly know what are you talking about.
My thouights have always been more pointed to tourism oriented investments, rather than clear property reselling, there lays the reason that I can see some light after all. Maybe too entusiastic, but just cannot help it...
How I see it biggest problem you mentioned is 90 days season in big majority of area on the coast, with exception of Istria and Dubrovnik.
As for bureaucracy and incompetence of Croatian government, we are very well feeling it in day-to-day basis here, maybe therefore we also feel step by step improvment, slow but still...Croatia will join EU and laws related to points we are discussing are and will be changed.
Iraq comparation is quite interesting.
Good luck with finding a place for you and family, I am sure you will find nice place you will enjoy and relax.