Looks like Milan didn't consider your points before going for Modric. A club should go for a younger player who will play for long in the club. When a young player is growing, he improves in skills and quality but for old players, they become weaker and lose their pace as they grow older. Gone are the days when old players were the best due to experience. Currently, the younger players gat it all.
If you look at the club's history the are mostly made up of more experienced players regardless of age and that have actually helped them achieve a lot in the past. I think Modric has a lot to offer them, his experience will definitely help the team. Forget the fact that at Real Madrid he was declining in performance, I think it's because Real Madrid's level is high and they level is demanding top performance but that is not the case at AC Milan. This old players costs them less although the salary might be a bit high but the performance will not be the same with that of young players if compared.
Old players on the other hand always commit themselves to the club and ready to give their best until contract ends whereas the young ones have a dream to play for every top team every season. The case of Newcastle and Isak is enough for us to understand better. The old ones are actually weak but they are very committed and that's what matters, not the ones that are energetic but their mind is elsewhere.
You're right some of these young players are not comtempted but I can't blame them because when big teams come for them they offer them high salaries and also every player dream of winning trophies and these dreams are likely to come true easily with big teams. Imagine with Isak performance last season there was nothing to show for it, if he was to be in Liverpool or Arsenal or Chelsea they could have won some trophy.