The only reason Instagram took those actions—they knew they could have taken those actions a decade ago—was that they were afraid of laws like this one. They were afraid of Australia banning access to social media for under-16s. They were afraid of the lawsuits that are happening in the United States.
You have to put them in situations where they are afraid of consequences, because of the amount of money to be made from cutting corners and from maximizing the number of connections, no matter the risk for these kids and no matter how addictive this is, for advertising dollars. They have to face consequences if you want them to behave well.
To the second question, on how we keep encrypted messaging secure, we need to think a little more expansively. For example, if I am a child on an encrypted messenger and an adult sends me a lewd image—I did not ask for it and I do not want it—I should have the ability to report that adult. No encrypted messaging has been violated by me reporting that adult. Platforms should have an obligation to take people off their platforms who contact children in that way.