Your anthropomorphic tendencies are confusing you. An "observer" for the purposes of the discussion is any part of the system that is our universe. If you have system dynamics, you have theoretical observers. Humans are relatively efficient observers, but not at all necessary for the kind of observer dynamics you seem to be discussing to exist.
Your argument reminds me of the Marquis Pierre-Simon Laplace (1749–1827), who was known in his own time as the Isaac Newton of France:
It is ironic that you quote Laplace, yet your stumbling block is that you repeatedly fail to understand one of his most important contributions to mathematics. Laplace may have been "arrogant" as your quotation asserts, but he was also technically correct.
Two points here: NO observer from within four-dimensional spacetime exists who has comprehensive knowledge of this kind -- not even a Laplace. And yet there it is -- the universe, all the same. It was here before we humans got here, and will likely survive when/if we are here no more.
Second, the person who makes such a statement has effectively promoted himself to the status of a god, or even of God Himself.
Amazing. Betty Boop, that "whooshing" sound you heard is the arguments of Laplace flying right on over your head; you "points" clearly demonstrate that you do not really understand what you quoted and its context. This is not philosophy, it is mathematics. Given that Laplace was supposedly such a bloody genius (and he was wicked smart), wouldn't it behoove you to try and understand the mathematics and reasoning from which his argument was made rather than simply dismissing it?
You may not like Laplace's personality or beliefs or whatnot, but that is no grounds upon which to invalidate his thoughtful assertions.
The determinism of Laplace fell to the realities of quantum mechanics. At the most basic level of the universe, subatomic matter is not governed purely by cause and effect.