Why Air Canada’s CSeries deal is good news for all airlines

This somewhat overstated. The current competition is the A319 and 737-600/700. For the airlines it boils down to cost, acquisition and operating. To some delivery time might be important. Right now Bombardier appears to have higher manufacturing costs but lower operating costs. If fuel prices go up, it will be good for Bombardier if they can keep their production costs down.

While this is only an LOI, they need an aircraft to replace their 190's. Boeing is taking half of them off their hands in exchange for the 73 contract. Obviously they are going to have to change their business plan if they are going to be using 130-140 seat aircraft in place of 95 seat models. Part of that will have to be improvement in customer service if they plan to fill those seats or WestJet will continue to hand them their butts

The only problem I see is Air Canada will put way too many seats in them and they will be like sitting on orange boxes, another sardine can for them

Calm down, it's just an LOI - there is no commitment for Air Canada to buy anything at all.

This is just Canadian bait to get other airlines to put their money down for CSeries aircraft - a win-win "favour" for Air Canada to have a lawsuit against them dropped - after which probably Air Canada will quietly back out.