Service-based stuff is more localized (as opposed to a good one can ship to any market). The closure of mills, mines and other processing facilities has left a lot of places in the United States behind. Is this a good thing?

It's no more a "good thing" than it is a good thing to have a factory that emits pollutants. Every factory emits pollutants. You can't assess in isolation whether it's a "good thing" or not whether pollution is being emitted, because pollution is forever and always undesired as side effect of factories - so if you're figuring whether it's a good thing or not, it has to be balanced against the economic positives of the factory. We might prefer it if no factory, mill, mine or processing facility ever closed, because such closures have negative consequences for the places they are located. That's as true of domestic competition as international, BTW.

Then there's the looming specter of a conflict with China, which has 2x our manufacturing capacity but even that doesn't tell the full story when you throw in raw material sourcing and processing, which they also have....

Sure. But the reason we have the best military in the world is because we're one of the richest countries in the world. One of the reasons we're the richest countries in the world is because we built the current global economic system to benefit us. That's what allows us to spend about a trillion per year on defense. It's what allows us to have massive technological advantages over other countries. Because we've built an economy that: i) operates as efficiently as possible, allowing us to be very wealthy; ii) rewards brain activity as much as possible, allowing us to be very technologically advanced and attract the world's best brains.

There's lots of unknowns, but it's hard to argue with success. Young people overall aren't having trouble living the American dream because of anything having to with international trade, it's because labor-intensive goods that rely on positional scarcity (housing, education, health care) are always going to increase in cost relative to the economy as a whole as society gets richer. So unless you do something with your domestic politics to change that, tinkering with the international structure isn't going to do anything about the relative cost of those goods.