Spurs last year went from 62k v Stoke to 42k v APOEL. The reasons aren't hot air, there is apathy because of the reasons. People aren't attending because they aren't arsed, they aren't attending because there are genuine reasons, the majority of which are mentioned on here and the club need to act upon.
Pep does care about the champions league. When he won it in 2009, 22k turned up for one of their group stage games. He won't be arsed about us only getting 40k tonight, it has no effect on the result.
Not attending champions league games is not a Manchester City problem, like you said only Liverpool treat it as the holy grail because the true holy grail they haven't got a hope in winning - the premier league.