Apple must be an incredibly stifling and frustrating place to work for smart, 
  creative people.

I agree. And yet, they keep producing all this innovative stuff. It's a paradox, to me.

Similarly, being treated like a child must be incredibly stifling and frustrating for smart, creative children.

I agree with you. I'm just saying it could be worse.

Presumably people who work at Apple are skilled enough to have lots of options and stay because they're happy with the way the company is run.

I would bet then either the rumors are not true or it's more nuanced than we know. Apple seems to produce good software quickly. How would that be possible with a company full of miserable developers? We don't hear much, or anything, about big employee churn rates at Apple either.