I agree with #3. What kind of voice would you or I have if there were only one name on the ballot--or if there were no ballot at all--or if our ballots weren't counted. Elections are the opportunities people have to speak. However, the two-party system has become a two-edged sword, I'm afraid. Like unions, they once served the function of uniting like-minded constituents on major issues on which they could agree. Today, the parties have become monstrous and distorted, almost unrecognizable. However, any smaller factions or parties really don't have a chance to do anything but play spoiler on the national level, at least. On the local level, third or independent parties have been able to effect change, though. In any case, I'm glad I live in a place where we have elections and the right to form political parties--which we then have the right to join or not.
I believe that one-half of this question is true. America's system of elections is certainly one of the most democratic forms of selecting public officials. Polling is done in private, and the counting of ballots is done in as precise a manner as possible (the 2000 Presidential Election balloting in Florida notwithstanding). I believe the nation's two-party system is a detriment, however. Although other smaller political parties exist, none have come to the forefront nationally in such a manner to challenge the power of the Democrat/Republican pairing. Sadly, too many people vote a straight party ticket, regardless of the candidates involved. I believe the rise to power of additional parties would give American voters a wider base on which to select their candidates.
In my opinion, they do to some extent, but not as much as I would like.
Of course, elections help to make America a more democratic nation if the other option is not having elections. You can't have a democracy without elections.
However, I do not really think that our party system does as good a job of making the country more democratic as it could. When we vote for a particular candidate, it's not clear what we are voting for. Are we voting for the candidate's personality? For his/her beliefs? For the beliefs of the party?
Then when government screws up, whose fault is it? Right now, are our problems the Democrats' fault for making bad laws or the Republicans' fault for blocking them from doing what they really want?
I wish we had what political scientists call "responsible party government." This is where the party says what it will do if elected. We vote for the party, not the candidate. Then the party that wins gets control (no having the President from one party and the Congress from another, etc). Then we would know what we were voting for and we would know who to blame if it didn't work out.
This would make us more democratic because our votes would mean more in terms of actually affecting what the government does.