I must admit I find myself somewhat taken aback by the sudden interest from some members in carving up a useful and well patronised local service! Harrogate Loop it may not be but this isn't a rural branch line through hamlets whose population is measured as being three dogs and a goat. Two trains per hour between Darlington and Saltburn is a perfectly reasonable service provision and indeed I would suggest the minimum viable. In this area there are good bus links and also very good road links. You reduce the service to hourly you may as well not bother as you'll just send the traffic to the bus and the car. I quite agree that such patterns shouldn't necessarily never be up for change but there's a reason why the pattern here has endured for literally decades and it isn't just inertia.
That isn't to say that there aren't things that couldn't be improved or changed. Separating the Whitby and Nunthorpe services from the Durham Coast is very sensible as it avoids importing delays onto that piece of railway and makes it easier to recover services in both directions. Nunthorpe at the minute suffers from the issue of in the event if delays the easiest way to recover the service is to terminate and restart at Middlesbrough meaning an hour long gap (i.e. the same issue that TPEs services to Middlesbrough and Scarborough used to have). A shuttle however has no such issue.
Once the upgrades at Darlington are complete you will be able to remove at least two conflicting moves per hour across the ECML (the Darlington - Saltburn will use the new bay) and possible a total of four if, as I suspect happens, the Bishop Auckland service is split at Darlington. Which helps unlock capacity there without harming the local services any (arguably makes it better, I regularly catch a train that's from Bishop and it's often late due to having to thread its way through Darlington and over the ECML). It might also allow the re-introduction of a regular service between Darlington and Hartlepool. Reinstatement of the second through platform at Hartlepool remains on the cards which eases that bottleneck and the introduction of a semi-fast Middlesbrough - Newcastle service via the Coast (the remains of the Northern Connect plan) is still on the cards for some point in the future.
Hacking away at the local services seems a bizarre choice to make particularly when there's no obvious reason behind doing so? What happens with TPE and Northern's services would seem to be two separate issues which have been conflated for reasons that aren't entirely obvious to me.
As to the issue of TPE serving Saltburn then I would tend to agree with those that have posted that it's really just an attempt to make use of otherwise dead time. The extension to Redcar was pure operational convivence which could generate a positive piece of PR locally for the politicians and the company. The reality was that in order to improve the resilience of the service at Middlesbrough more time needed to be inserted into the schedules however there's nowhere particularly easy for the train to be stabled for any significant length of time at Middlesbrough.* Hence the easiest win operationally and political was to run to Redcar. Extending to Saltburn has a similar flavour though perhaps slightly more political than operational.
Going to Redcar nor Saltburn is particularly vital. The trains to and from Redcar mostly move fresh air (perhaps a dozen(ish) passengers per train?) apart from when Northern cancel a service then they get pick up all the displaced Northern passengers! So it's not the most useful use of the resources running to Redcar or Saltburn but when the decision has been taken to improve resilience at Middlesbrough (the key point on the route) then you might as well run to somewhere else in that dead that if you do end up cancelling isn't a massive drama (if a TPE is cancelled there's plenty of Northern services to take up the slack).
*The sidings to the west of the station (which are accessible from P2 where TPE terminated then) are only long enough for a 3-car 185 not a 6-car 185 or a 68 and rake of Mk5s. The sidings to the east of the station can only be accessed from P1 so that requires the train shunting to the west, reversing on the mainline and then entering the siding through P1. The only other choice is to reverse in Guisborough junction (just off towards Nunthorpe and Whitby) which TPE used to do regularly but as it's a single track line that blocks the line for as long as your parked in it which messes up the timetabling for Northern. Therefore, easiest win, go to Redcar and turn around there.
Thinking longer term, if the Boulby Line came back into use you could divert the 'extra' Northern service from Saltburn rather than having to run another Northern service between Middlesbrough and Marske. Might improve the operational case somewhat.
The last version of that plan that percolated included a Saltburn West station which provides a service to a slightly different part of Saltburn whilst maintaining the overall two trains per hour service to the town more generally. Somewhere in the vicinity of
this overbridge on Marske Mill lane as I recall.