Yes, metamagics apply to at-will spells, but not arcane bolt/blast.
As for the SPs... are you kidding me? Does it matter if you have -400 SP if most of your bread-and-butter spells are dirt cheap?
Heightened hypno normally costs as much as your highest level spell, so by level 7 that's 25 SP. You are saving 24 SP every cast. By level 18 you are saving 49 SP per cast. You can cast it all day and all night, without really worrying about weather or not you'll run out of SP. You are now a crowd-control god.
If they fix metas so they apply appropriately to at-wills (i.e. make them cost as much as the higher level spell would) or if you are using flesh to stone or something, you are sill spending squat per cast. I think you'll save more than enough to make up for the minus.
Note pale master will still have it's uses. perma-undead with death aura going around fingering and wailing will still be more than just a little bit sick. Nigh invulnerable to boot, especially wraith form. But they won't have the long-term staying power of the archmages with their at-will spells.
But all these things have costs. Nobody gets something for nothing. Every wizard is going to have choices to make. No more generic wizard with the same set of spells with every damage and critical line maxed out.
People will have to make choices, but those choices will mean something.