Also, I'm really struggling to figure out why everyone is so excited about iron-nickle on the moon. Iron is already abundant here on earth, it's extremely cheap and iron mines and steelworks struggle to turn a profit. Or ice, for that matter. Ice is a dollar for a 10 lb bag, guys, it's not that big of a deal.
Personally I'm not as excited about the iron compounds as the (eventually processed) lighter metals that might be available, although there'll be uses for it. But let's skip that and go to the water.
If water is available on the Moon, then we don't need to ship water (to be the entire supply, or replenish the losses in recycling) on either Moon bases themselves or, more importantly, in space. Moon ice taken to Earth orbit would be a big saving on effort (especially if packaged up in a mass-driver compatible payload, so leaving the Moon won't even need Moon-made fuel for the rockets).
As has been pointed out, ice from asteroids/comets/Saturn's rings/wherever could be 'better' than the Moon (less energy, though longer in transit), but would take a while to set up.
The same extends to building satellites (or spacecraft intended to be built in orbit) on Earth and launching them. If we can get the resources on the Moon (and, even better, do the refining and fabrication done there, so that we don't have to loft more mass than necessary), the various asteroid/Jupiter/Oort Cloud/Alpha Centauri missions can be got going without
everything coming from Earth. It's a cost for the initial infrastructure, but then it becomes a significant saving for the foreseeable future, and a good prototype (vacuum-pervaded hostile environment, if not gravity-less) for the asteroid-belt factory complex that may well drive the Moon-based system out of the mainstream business.
But these most basic ore-processing businesses are probably not meant to compete against Earthly ore-processing businesses in supplying Earthly supply chains. There
may be some things more cheaply made in space/on the Moon then transshipped Groundside, but I don't think it'll be bulk stuff, but specialist endeavours for which the natural airlessness and (off-Moon) gravitylessness are the key aspects...
Guys guys guys you don't seem to understand economies.
Any sort of metal is worthless if it's not on the earth and easy to get.
I don't actually understand the nature of that argument, my apologies... however:
It will always be cheaper to build something on earth and send it into orbit then to build something on the moon.
Always.
YMMV, obviously. I've just given my POV on the relative economics that might be a factor.
So I don't think I could envision more then 400 people living on the moon. Unless they terraformed it but that is another ball game
There will be no "terraforming" of the Moon, prior to a whole sea-change in known physics that allows such things as artifical gravity, gas-impermeable energy shields, etc... This is Far Future Sci-Fi Tech stuff. But there's no reason to believe that an outpost (or several) on the Moon
for whatever purpose[1] could not extend to town size, with long-term tours of duty. I don't know whether married couples would eventually be purposefully dispatched to settle the place, allowed to happen in situ or just that the 'family situation' would initially arise by mistake/accident, but the longer the settlement continues the more chance that there'd be native-born children, if that's what you're looking for. But even a base that isn't a child-rearing one could be large enough through the sheer need to support the main (Research/Manufacturing/Exploration) crews with medical support, provision of supplies, operating the landing field operations, etc. And, at some level, policing the sheer number of people who are there...
And there wouldn't be just one base. Whether they're three-man research teams (who share the caretaker duties as well as their site-purposed ones) or such fully fledged infrastructures as described above that appear around the launching/landing areas that act as main bases, there'd be needs for some to be here, some to be there, some to be somewhere else...
'Huts' from which to maintain the farside radioastronomy sites, polar-region ice-crater monitoring/harvesting, mining claims needing at least
temporary manning (regardless of automation) where the densities of various meteor-delivered/selenologicly-provided deposits
are worth processing.
And I'd site the non-mass-driver locales significantly off to one side of the mass-driven trajectories, in case of under-run issues which mean suborbital trajectories of hulking big lumps of ex-Moon material plummeting back down to the surface, and I don't know if setting your major manned base even a few tens of kilometres off the equator would be considered safe enough in the event of some slightly deviated misfire of an equatorial mass-driver that sent the load spinning almost entirely around the circumference, should even happen.
[1] At least at first, for study only. ISS-like. Amundsen-Scott Antarctic Base-like. That sort of thing. But then... well... depends on what they find (or find they can do). I predict refinement and extraction of various Moon resources, but how much, what proportions, from where exactly and for what purposes
is so far unknown, because of the aforementioned "couple of geologists in the whole of Africa" issue. But there are some good ideas.