A 5 minute stroll is much more attractive a proposition than a 20 min walk each way, particularly in the dark wet winter months. So better if you are looking at modal shift for commuting. And it would bring Cosmeston Country Park within walking destination of the station as a leisure destination too.
If the cost was limited to the actual infrastructure cost then it would make a lot of sense, but the bureaucracy of relaying a closed line almost certainly makes it too much effort (eg Portishead).
Why is it too much effort to build new, or re-open old railway infrastructure, but building new roads, local govt won't hesitate to buy up the land and property needed to make it happen? Apart from some industrial units immediately after Penarth station and the houses on Birch Lane/Rowan Close, rebuilding the line to Sully should be relatively straightforward.
Meanwhile, the Dinas Powys bypass proposal has gained a lot of support in recent years but ultimately will solve nothing, and will make traffic congestion even worse when it converges on the Merrie Harrier junction in Llandough, which is already well over capacity. Major enhancements to the capacity of the VoG line are needed instead, both in terms of longer trains and improved infrastructure.
Then there's the new road to the airport in the Western Vale, that the VoG council was keen on, again this will involve buying up land and property to build it.
Unfortunately, buying up some built on land and property to rebuild rail lines and undo the extremely bad and ill thought out decisions of the 1960s is inevitable. Or we will simply need to live with increasingly unmanagable and unsustainable traffic congestion.