OK, so a followup. I followed the advice of ChiTownAmateur yesterday. I cut to about 1-1/4" and did a multi-pass core aeration, an application of Lesco 14-20-4 fertilizer and overseeded with Park & Athletic mix. This was the first time I did it all on my own, and while it was a bit of money saved, I think I'll go back to paying for the pros to do it. Last year the entire service was $275 all-in (aerating, seed and fert).
This year's costs: Seed: $50, Fert: $21, aerator rental: $72 (including tax and damage protection). Add to that the fact that loading and unloading a 275 pound machine is not a trivial exercise. The actual job of core aerating my lawn with plenty of curves and sharp turns was the single most physically challenging thing I've done in years, and every muscle in my upper body is still aching. So basically I'm paying the local company roughly $135 to do it all for me, which, given the hard labour involved, is well worth it IMHO.