I always think of the flowers we have in our garden, I think we more than do our bit for wildlife. We have two dogs I know what you mean about keeping the grass cut. We have two families of blackbirds in our garden I love watching them, when their young were leaving the nest for the first time a couple of weeks ago I watched the male blackbird he was dive bombing our jack russell to chase him away from his babies our poor dog was petrified
The blackbirds will be after the worms, so as long as you don't kill THEM off I don't think cutting the grass is going to harm the blackbirds.
We also have dogs, and perform the "pick up" ritual before each mowing, which involves me going round with a load of plantpots, marking the dropping zones, and my OH or his son following behind with the dustpan and paint scraper. The contents are disposed of down the loo.
Our grass is a mixture of many 'weeds' including daisies, ajuga reptans etc. We try to maintain a balance so that the large-leaved weeds do not take over. Other than that, Nature does pretty much what she wants, and we just give her the occasional haircut.
I'm fortunate to have the space for some short grass and a wild flower lawn. If I didn't have this space I think I would go for a wild flower lawn but with mown paths and features, this gives you the wild flowers for the wildlife but some interest in the paths and of course areas of short grass that you could train your dog to do it's 'stuff' on!!
I also have a dog and as a rescue he was never taught boundaries so all areas of the garden a 'free access' as far as he's concerned!! I have found that by mowing paths this does prevent 90% of 'tramplings' across areas you'd prefer not to have four paws pounding!!...
Just a thought and a way to get the best of both worlds and some good interest on your lawn?