I, and several others here have had experience with youngsters and rugby and the fact is it is a contact sport and many youngsters love the idea of rugby, it is the actual tackling and hitting the ground etc they don't like as they have done little like this as a kid. The next fact is that they have no interest in hanging around a rugby club as they have their own social lives that does not involve hanging around with people they barely know.
I'm sure we can engage them as supporters as they like to watch contact sport but a shrinking number want to play the game and we have to deal with that by focussing on what we have and trying to encourage a few thousand more to play the game. It will turn and youngsters will want to play contact sport again but that ain't now.
This hasn't been my experience but I'm not sure what age you are talking about when you say 'youngsters' as opposed to 'kids' I think it might be harder as kids get older to get them used to contact if they haven't had any experience previously..
In terms of the whole contact thing, there are always a couple of kids who don't like contact and just aren't built for rugby but this is no different to previous generations. In my opinion and experience, kids need:
good coaching that teaches them how to go into contact and how to deal with contact
good coaching that teaches ALL contact areas, not just tackling and ball running
good coaching that acknowledges and highlights the dirty work like great clean-outs and excellent scrummaging and connecting those parts of rugby with success and the 'glamourous' parts of rugby eg. tries.
In terms of the social aspects of rugby, I'm actually in a bit of an 'experiment' with this right now with my son's team who are U15s. Personally, I think boys generally just want to hang out and have fun. They don't need a lot of money (just a lot of food! LOL) but they want to make connections with kids their age and have experiences. Those experiences can be as simple as playing touch and having a couple of sausage sandwiches afterwards. Going around to one of the boy's house to sleepover and watch the Rugby World Cup semi and play some Playstation.
Finally, I just think kids want to feel valued in the groups they are in. Not just by their peers but also the adults and the parents in those groups. Personally, I've always tried to find the kids who do the 'unnoticed' work in games and make a point of going and telling them what a great job they are doing after games. Being specific about a particular clean-out or tackle or even just if I've seen them encourage another kid or take leadership in a situation. Make sure they know that it was seen and acknowledge it.
Quite honestly, I have no idea if any of this is as effective as I think it is but I should have a better idea by this time next year hopefully. So maybe I'll be back telling you that I'm full of shit! LOL