Satoshi's words make sense. Of course, it's not the full picture, as sometimes there can also be negative feedback loops (as the op correctly points out), with people worrying that the price will go down, selling coins, causing the price to go down and others to worry about it more.
I don't know about Satoshi being into neurology and stuff, though, as this seems to me that it's a basic understanding of economics that accounts for human actors and their motives. I also wouldn't concentrate on the idea of a feedback loop and its origins here, to be honest. To me, it's just a phrase to help others understand how Bitcoin's value can grow with the growing demand.