And the benefit to using 5 car is that if you need capacity in future, you could add it.
This is very "TPE Class 185".
If you make it half hourly, you will start needing the capacity that day, as it will come up for far more journeys on the planners due to vastly improved connections, not to mention people choosing to go to Westfield etc because when they've finished there won't be a long wait for a train. Then there won't be the money or some other excuse will be used.
The issue is not it operating as part of the LO service - the heavy loadings are between Watford, Harrow and Wembley and stations on the WLL itself. Therefore, 12tph of LO services won't even make a dent in it. Clapham Junction to the WLL is not a significant part of the demand - people just go to platform 1/2 because of the more frequent service.
It needs to remain 8-car even if the frequency is upped. There may become a point where 12-car needs to be considered, or 8-car of something with an interior more reminiscent of the S-stock. But remember it's a regional service, not a metro, and just cramming people into a 5-car train with almost no seats as per LO is not a sensible solution.
Out of interest, have you ever ridden on this route and observed loadings and usage on an ongoing basis? I have been using it frequently for many years.