While you bring up some valid issues, I would like to point out some mitigating factors, as well as a few considerations that you might or might not have already considered. My enumerated points correspond with your posted concerns.
1) I assume you mean that the module size will be optimised for the shroud, rather than having two or more smaller modules contained in the same shroud. Howaver, I would like to point out:
A)Mass is the primary factor in determining the expense of launch, not shroud size. whatever the shroud size, the module will then be loaded with equipment, up to the mass limit of the booster. While modules constructed in space could be theoretically lighter, since they will not have to withstand the g-forces of launch, the heavier shell is actuallya benefit, as you need the mass anyway to provide protection against radiation.
B)Skylab demonstrated that propellant tanks themselves are rather easily converted to habitat spaces. While NASA decided on a "dry" launch strategy for Skylab, this was due to mission considerations: having a fully configured structure at launch meant that the Apollo crews did not have to spend their limited mission time installing equipment (well, that was the idea... the Skylab 1 team had a bit of work to do after the Skylab failed to deploy properl). However, a "wet" launch was equally plausible. This means that you could have as many modules as ou have propellant tanks. The only components you would need to stage are some of the engines and associated thrust structure assemblies... and some of these could be retained for reuse in space. Thus, using a modular approach, you can actually put up 3 to 5 times the mass as your built-in-space scenario.
2) Although you are quite correct that the docking joints could easily be sources of leaks:
A) The joints can be very easily sealed for permanent or semi-permanent connections. In the case of the former, you could apply a layer of cement around the joint, or weld the joint exactly as you would have to weld the individual large-construct panels anyway. For the latter, an industrial grade sticky tape and/or sealant compound would be sufficiently airtight (sticky-tape is the prefered method to ensure isolation in the most dangerous chemical and biological hazard facilities).
B)Modular construct makes assembly AND DISassembly easy. In case of refit (to accomodate new mission profiles, to renew outdated equipment and/or configurations, etc) or repair, dock/undock allows modules to be swapped out in a matter of days, if not hours, allowing immediate return to functional service; as opposed to the months, if not years, required to conduct the same operations on large monolithic assets, during which the facility would not be mission available.
C)You can reduce leaking by sealing the hatches, when not in use. If you have a fault-based leak, the hatches will prevent further loss of pressure/atmosphere until the leak can be sealed. Having these smaller modules also means that you have smaller segments that contain pressure. In the case of a general hull leak (which is MUCH more likely with the increased number of panel welds required or the monolithic structure), it is easier to restrict loss of pressure/atmosphere to a smaller volume, without having to worry about thin bulkheads giving-way due to the pressure differential created.
D)It is possible to reduce the risk of leakage, even for non-sealed docking joints, by employing a slide structure that can overlap the connection point. I have actually been working on a docking tunnel that incorporates this stretagy, with the added benefit of reinforcing the joint against stresses.
3)The joints do hold the modules together, but they are not the ONLY means of holding modules together (just the only means that you can actually walk through). You can reinforce the overall structure, first by mooring the modules together, and second by building trusses between/around the modules. Also, keep in mind that there is a limit to the size of component pieces in any construct. The attachment points betwee such pieces can be just as prone to failure, especially when assembled using an initially unproven method in an unfamiliar environment. Module docking is a long-established, proven technique. Monolithic construction will take awhile to establish in space.
4)There is no reason to assemble all modules in series. You can mitigate this problem rather easily by docking larger modules, in parallel configuration, to appropriately sized junction modules that will serve as hallways between work modules. This would limit operational volumes no more that having individual rooms connected by hallways in monolithic structures.
5)Again, there is no reason to assemble modules in series. Assembling the modules in parallel will remove the issue of disturbing other workers.
6)Yes, monolithic structures will have fewer connections that are susceptable to leakage. However, they have just as many points susceptable to failure, if not more so. Keep in mind that the docking joints are reinforced. They have been specifically overengineered in order to correct for this inherent failure potential... AND, they have been built with redundancies and contingencies to reduce loss of pressure/atmosphere in the event of such a failure.
That said, panel joints also have a risk of failure, as do the naked panels themselves, and these are NOT reinforced to such a degree. The greatest risk of failure is not even from stress factors, but from penetrating meteoroid (or micrometeoroid) impacts. For this reason, I argue that it is better to have smaller modules that can be independently pressurised, in case of such meteoroid damage.
7)Smaller modules are inherently divisible between the modules, and nothing prevents further subdivision within modules, especially modules derived from the equivalent of Saturn V S-II stages. 10m x 25m gives a significant amount of volume for a number of different activities.
It is also worth considering that a modular assembly can go online as son as the first module is launched. The module can be launched pressurised and equipped. Additional modules can be converted from the booster propellant tanks with very little effort. This original modules, and subsequent modules, will be able to conduct mission operations, and can also support the workcrews for any and all additional construction.
The monolithic structure, OTOH, would not be operational until nearly the entire structure has been completed (enough to be pressurised). Furthermore, the monolithic structure will require a pre-existing operational base to support construction personnel and facilities.
IF you have failure in a specific section, the operations hosted by that section would essentially be out of commission until the area can be repaired (or, if you have temporary repairs, it will be out of commission when you decide to conduct more permanent repairs later on). For modular designs, again, you just need to swap out the module, to be replaced with another. Temporary repairs might put operations out of service, but only for the length of time that monolithic structures would require (and perhaps less), but permanent repairs will involve swapping out the module, allowing immediate return to operations, while the damaged module can be repaired at leisure, with no penalty on operations.
Virtually all large monolithic constructions are actually already turning to modular assemblies. All naval vessels, and most large aircraft, are now composed of pre-assembled modular components (in the case of US naval carriers, at least, these are refered to as superlift
assemblies). Although not independently pressurised, these subassemblies are built first, and then assembled together, as opposed to older techniques of laying a keel and building upward as you go. These constructors turned to modular assemblies because: construction is easier; construction progresses at a faster rate; distributed forces are largely reduced (due to the inherent breaks between modules), reducing the amount of material required for fabrication; and costs are greatly reduced.
Finally, I would like to point out that there is no real need for an either/or
approach. I suggest an hybrid strategy, in which initial construction is composed of docked modular components, which can be reinforced for permanent or semi-permanent configurations. These modules would then be available to go online immediately, conducting operations and supporting the infrastructure for further construction. While this modular skeleton is being progressively assembled, independent work can be done on developing the monolithic
structure, including building a reinforced structure connecting the permanent modular assemblies. As an example, An initial ring of modules can be constructed, with structural work progressively added, binding the modules together. This assembly will then serve as the substrate for a large B5-type pressure hull. Then, even if there were to be a rupture in the large pressure hull, the population could take refuge in the independently pressurised substrate modules. Likewise, an assembly of modules could serve as the keel
or spine of a large vessel. Modules could also serve as capping points for excavation sites, allowing tunnels to be pressurised (perhaps with the addition of a fabric wall coat, in case the tunnel rock is too porous to retain pressure on its own.
