Great Post. Couple of clarifications though...
A GS can't just get someone banned. We have to have screen shot proof just like everyone else. We also can't be glowing unless we're doing official duties, that's why we have the GS tag in our names now, to be more noticeable. And yes, we've all agreed that the glows suck, you can barely see them half the time but that is a developer thing and we all know how that goes.
As far as "are they really going to bother to make an SS and report it?", how do you expect the staff to know harassment is happening if someone isn't reporting it?
There are rules against harassment in the ToS, and they do need to be a lot tougher on bullying, I totally agree with that, however, if no one reports it, no one (that can do something about it) knows its happening. I think that's what Supes is saying - if you don't report nothing can be done.
SS are necessary for the simple fact of proof that it's happening, otherwise its just an I said they said thing and ppl will just be flinging false accusations around. If someone didn't like you and started saying you were harassing them, and you got banned, without the proof, you probably wouldn't be very happy if you were innocent and would say where's the proof! I know GM's can look at logs, but logs don't show stalking/bullying in all its forms, only the verbal ones.
A great idea would be to have a "Contact GM" feature in the game, like most MMO's have now. Then the GM would be made aware immediately and could control the situation right away instead of days after it happened.
Bullying and harassment definitely need to be dealt with swiftly, strongly, and permanently. Those players should not ever be allowed to come back. Please please please encourage ppl to report, or report it for them, since this is the only way the staff will know its happening, and can then take action. Hopefully something productive comes from this thread on Aeria's side.