Some very attractive suggestions by tbtc and glbotu, especially the re-introduction of rail services to Wetherby, and opening a station at the back of the White Rose centre.
I think I must address the biggest question posed by the posters of this thread.
Why tunnel, when there maybe cheaper options available?
Ok well for a start after looking at Leeds station itself, there doesn't seem much room for expansion, without needing to demolish a load of brand new and expensive Office blocks to the south of the station, which could for start tarnish Leeds City centres reputation as being attractive redevelopment land for property developers. I'd argue one of the main reasons why a railway is built or improved, is firstly to relieve congestion, secondly to help raise property prices, thus stimulating the areas local economy. Would it not be counteractive then to go and demolish what is some prime office land for rail expansion? So how do you go about and expand rail services in the area without demolishing some prime property? Well you do what was learnt in London and go underground.
Leeds rail services, at the moment suffers from some chronic peak time congestion. I think mostly due to the fact that Passengers interchanging between trains and those who want to embark and disembark at Leeds city centre are all concentrated on one point aka Leeds City station. So to relieve this you need to create more places in Leeds city centre for passengers to be able to interchange, embark and disembark, in effect dissipating the flow of passengers over a wider area, true you could open additional overground stations on existing rail lines, but these stations can only be opened in areas that are too far away from Leeds City station to be truly effective. This also has another positive of allowing passengers to potentially embark and disembark, closer to their places of work, helping to relieve the pavements and buses of pedestrians and traffic.
But of course how do create these additional stations, with which to disperse passengers over a greater area, but still close enough to main station to be truly effective, within such a densely urban area, without requiring extensive demolition? Well of course you go underground.
Another positive about underground tunnels is that it's easier to segregate local services away from lumbering freight trains, or express trains, within highly dense urban areas without requiring large scale demolition. The issue is even if we manage to expand Leeds station, you'd still have freight trains or express trains, slowing down local trains, making achieving a close operational consistency, of say a local service every 3 - 6 mins almost impossible.
Ah you may say, but overground railways such as Waterloo station to Clapham junction, and the Charing Cross to London Bridge lines manage to achieve such frequencies without running trains through tunnels and even with having both local and express trains to deal with. Both the express trains and local trains especially at speeds below 40mph on these lines, achieve relatively similar acceleration rates and use relatively similar train lengths. Meanwhile in Leeds the difference in the acceleration rate between say a Class 333 and a Class 91 or even an IEP is far more marked, than say a Class 375 and a Class 465. So I would propose additional lines that segregate the local services away from the throat of Leeds station, meaning local services aren't restricted by the slower acceleration rate of the express train in front and can be taken to their local lines without impeding said express train. But how would you go about building these lines without needing to demolish some prime office land? That's where the answer lies within tunnelling.
I hope this answers some peoples questions.
