Close racing can still lead to overtaking - look at Indycar.
That's an Oval/drafting benefit. On road courses they have plenty of issues also. Still a bit better than F1.
One of the biggest issues in F1 are the braking zones. They're too narrow.
A rough example of a braking zone:
|-----------------------------------------| < Something like a C6R
|-------------| < f1 braking area
Now in the F1 braking area you're still having to scrub off a lot of speed but doing so in a very short distance due to the awesome brakes. However, your margin for trial is greatly reduced because you can't afford to brake late. The braking area is so condensed by the powerful brakes that you literally have to brake at the same spot each time. Trying to deepen your braking will have you running wide as you've carried too much speed into the corner to have any chance of holding the line.
Ofcourse the downforce adds to the braking problems but they can certainly work on the braking perfromance without making downforce cuts. Lengthening the braking zones means the drivers are willing to risk a bit more late braking to get by. This would also give people a chance to alter their setups. You might be have a car that's great on the brakes but has a mid corner push or poor turn in vs a car with great corner speed but suffers from longer braking distance. Right now, if that's the case, the car behind still has no chance because the car lenght of real estate he needs to make the pass is simply too much for the brake zones on most corners.
For closely competitive cars with capable drivers, passing eachother will always be an issue. However, when a car behind is clearly faster and still can't pass on the brakes, it's needs to be addressed.
btw, I don't want to see speeds in F1 reduced. I love F1 for it's technical marvel but you can increase things in one area while taking away from another. Not only do you preserve the speed but you make the show better.