Since most (if not all) commercial aircraft are equipped with inertial and satellite/GPS navigation, why is increased separation between aircraft necessary? Can't controllers immediately identify the position and velocity of every aircraft?
In good weather, airports can move lots of aircraft because the ATC separation standards are much less than the bad weather, poor visibility ATC separation standards.
“Current technology” really hasn’t changed much over the years as ground based ILS CAT II and CAT III are still the most accurate ways to get get aircraft on the ground in bad weather.
Most of the increased separation is due to the requirements to have uninterrupted ILS ground signals reaching the aircraft on approach. Aircraft waiting to take off must wait behind hold lines farther from the runway, and aircraft on final must be spaced farther apart so as to not interfere with the ILS signals.
Once on the ground, aircraft will often experience delays getting to the gate due to the difficulty of taxiing in near zero visibility. Even parking at the gate can often require special standards and procedures.
There's always the possibility of machine error, human mistakes, and "blind spots". These can be minimized but never entirely eliminated. Things like minimum separations are set to provide a margin of safety in case things go wrong.
For landings, it is also necessary to provide a plane that has just landed with enough time to clear the active runway before the next plane on approach puts its wheels down. This also figures into how far apart the planes get spaced while on approach.