CEX by virtue will always be centralized, leaving the exchange as a target for hackers since they hold the fins of thousands or millions of people. If you're to build a CEX to combat hacks, you'll have to invest heavily on security to prevent any beaches of funds or user data.
I can't make it more transparent as it requires users to trust the exchange while crypto is meant to operate without the need to trust a 3rd party.

I'll personally prioritize building a more robust DEX. It's impossible to keep up with all the new coins being created, but they can still get a trading pair on a swap ecchange or a DEX if they get enough demand.

It isn't.

Don't know, but pretty sure I will focus on making money.

Any centralized exchanges do focus on their security, that's one of their life to survive and gain trust. We see many centralized exchanges got hacked, but it's because there's always a hacker who can beat the security.

Most people like less KYC, centralized exchanges also prefer less KYC in order to attract people as many as possible, but they can't do anything if it was asked by government.

- The highest possible liquidity level, as this is the greatest guarantee for users. First, the platform is capable of processing all withdrawals without any problems or disruptions, and second, because this plays a protective role, as users are assured that their assets will be reimbursed in extreme cases.

- Active support channels, as users are most frightened by not receiving adequate support in the event of a problem. Many platforms have lost their user base solely due to poor support.

- Simplified and minimally invasive KYC verification procedures. This stage has the greatest impact on the user experience, as it directly affects user privacy.

A newly launched centralized exchange is impossible to be a Tier-1 exchange with high liquidity but it's true that high liquidity shows that exchange is attractive with users. With high liquidity, users will be more easily with entries and exists through their orders without considerable price impacts. No users especially with enough big capital, want to lose money because of low trading volume then price impacts from their purchasing or selling orders.

KYC policy on CEX will be nearly the same because they will have to obey to government laws and regulation enforcement. They can not be unique like  no KYC CEX while other CEX are KYC, and they will be first priority of government with lawsuit and attacks to shut it down.

I agree that KYC is extremely dangerous – and useless.

Bad security can cause exchange hacks, wallet hacks and exchange death. All centralized exchanges must pay attention on their platform security and exchange treasury security management.
Exchange graveyard and reasons of exchange deaths, as well as verify security of partners that provide services for their CEX. The Bybit hack with bad security from the breached Safe wallet company.

And to add to this... only the strongest will survive. The rest will either be destroyed through funds mismanagement or hacks, or bought out by the bigger players. That's why the market share of crypto exchanges consolidates to the largest 3 or 5 exchanges, and why everyone I know is n using P2P trading platforms instead of buying and selling from an exchange.

I don’t see a straightforward solution for making it hack resistant.

There are many big names that have been in the exchange industry for years, and to be honest, I don’t think there are any features they haven’t already thought of and implemented.
So, instead of thinking about what new features you can add, I believe it’s better to focus on what the existing ones lack and how to improve them.

For example, all exchanges offer many features to secure users' accounts. Although these features are effective in fulfilling their purpose (securing accounts), many users find them inconvenient or annoying. Personally, I don’t like having to type a 2FA or email verification code every time I log into my account.

Any centralized exchange will be successful only if all requirements from regulators are met. For  bitcoiners, these rules are not at all beneficial, since providing all the information from their documents, or about the origin of funds, which sometimes arises as a question on exchanges, completely violates the whole idea of ​​​​bitcoin independence. The exchange must balance between the requirements of regulators and the desires of customers, but the fact that regulators now want to completely control everyone makes it more difficult for users to trust exchanges and their sometimes strict rules. I think that the answer to the question should always be in the interests of whoever owns the exchange, and it is no secret that it will foremost worry about preserving its business, and here it will have to bow its head to the regulators.

As a customer, what I want right now is a more transparent exchange (or any service really), whether in their KYC process, customer support, or others. For example, it would be nice if my withdrawal got stuck I got a nice reply saying the reason why and what the exchange is doing and the ETA for it instead of a simple "we're still investigating it and would suggest the user to wait for 2 weeks". I'm not sure if that's difficult since I don't know the ins and out of running an exchange business right now, but I'd expect more customers would like to use my service if I know how annoying it is dealing with unclear CS responses.

I expect it will be difficult if I have an investor and they don't want my exchange to attract the media and posting negative rumours about it though.

I'll lean on the good customer-client relationship. When I mean the customers, they're the users that I'll always be quick to address their issues and concerns, so that no one is left behind. And about clients, they're the listing partners and projects and they'll also get the quick response from my team if ever any issues. Because if there is a good relationship to both ends, I think they'll be helping to keep up with good volume and high liquidity that a cex needs to have in order to maintain its presence into the tougher competition that it has got right now.