“Do you think that management (meaning everyone above you) should strive to keep employees happy, within reason…?” Yes. However, “within reason” is very subjective.
“Do you think happy employees are more productive employees…?” Yes. However, an employee’s happiness involves so many factors that it’s virtually impossible for management to address them all, and in some cases, maybe not any of them. (For example, health benefits. Depending on the size of the organization, many levels of management can do nothing but continually ask for it.)
I think “what is reasonable” for management to do to address low morale also depends on the type of work, type of business, and type of individual that is working.
At the same time, there is a lot an individual employee can do to deal with low morale, but again, it depends on the person and the situation. When morale was at an all-time low at my office due to budget cuts (reduced hours, no cost-of-living raises, etc.), layoffs, reduction in health care options (down to one), lots of organizational changes, an office move, and so on, I just hunkered down, did my work the best I could with what I was given, and all the time being grateful that I had a job. Things change…whether it be my company, my manager, or me… I could be laid off, I might quit. All that matters at any given time is knowing what I need to do, and doing it.