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If you want to look at how coalition governments work elsewhere, you need to look at Italy and Israel. Those are among the purest multi-party systems.
In both countries, it is true that some parties sat down and "made concessions". But in both countries, the parties were the mainstream right and one or more fringe fascist or outright racist parties. As the price of staying in power, the mainstream right "conceded" that open fascists and racists have a legitimate place in a ruling coalition.
In a two-party system, I am at least thankful that extremists tend to paralyze government, not empower it.
The failure of the two party system, unfortunately, is the fact that one party is always the leader. In the case of the US, it's the GOP. The GOP has successfully taken control and shifted the Overton Window in the country further and further to the right since 1945. It will never reset back to an equilibrium with the structure that we have currently. Electing a Democrat only loosens the noose, it doesn't remove it.
Disagree. The GOP candidate won the national popular vote only once in the last eight presidential elections. They have not passed any significant national legislation in that time. Meanwhile Democrats have enacted health care reform, climate investment, and now pro-choice laws.
The GOP can only hold on to power via voter suppression / electoral tricks, and that strategy won't work forever.