One problem is defining what "intruding on others' happiness too much" means - it's not obvious how to derive from this principle the hours when making loud noises within city limits is OK, or what about necrophilia in public, or pollution, etc. Almost anything I do might make someone very unhappy and I'm not sure what philosophical principle can be used to distinguish cases where I should stop doing it from cases where I should be able to reply "toughski shitski."
Another problem is whether it's OK to require a thirsty person in a desert to give up all their assets in exchange for water, and whether it's OK for the thirsty person to knock you out and take the water in response; most people would side with the thirsty guy for what I think are very good reasons in terms of the practical implications while objectivists would not.
To your first point, making someone unhappy isn't unethical. Making loud noise pretty much at all, is infringing on people's freedom. No one will bicker if you can't avoid the sound like starting a car, but if you play a loud TV it's unethical. Necrophilia is totally fine by this ethical standard, as it disgusting you is not infringing on your freedom (to say sleep, as the noise example). Pollution is a tough one, but trying to minimize it would be more ethical as it infringes on less people, etc.
To your other problem, I fully understand the practical implications. Knocking the guy out and stealing his water is pretty unethical. However, coming to equitable terms is fairly easy. More humans can think one step ahead and just gouging the guy for all his posetions means he won't help you in the future. Long term, that is bad for you, thus you'll likely not charge too outrageous
You might see logical consistency in the above; I see a bunch of things tied not by any logic but solely by the fact that a set of people agree with all these things.
For instance, why is making noises infringing on your freedom from noise, but the requirement of silence is not an infringement on your freedom to make noises? Freedom from noise and freedom to make noises are both "freedoms" and one comes at the expense of the other. What is the way to weigh their relative importance which is universally applicable to other cases and not rooted in culture or personal preference?
Another problem is whether it's OK to require a thirsty person in a desert to give up all their assets in exchange for water, and whether it's OK for the thirsty person to knock you out and take the water in response; most people would side with the thirsty guy for what I think are very good reasons in terms of the practical implications while objectivists would not.