There are lots of options , they just carry more risk , higher rewards are a reason to change your asset allocation.
I change my asset allocation with the change in markets , I always like to have my money where the best returns are.
I'm not exactly sure the OP is asking how best to determine his personal risk profile. You make many excellent points regarding holding equities vs. cash but without knowing the rest of the OP's portfolio, I tried to keep my suggestions limited to what may happen within his cash portion of the portfolio. Without knowing the overall objectives of the OP, and only knowing he wants to increase the return on a cash holding. If the OP needs that money in 6 months for a down payment on a house, then suggesting to move it to higher risk holdings may not be the best idea.
Personally, I'm a big fan of equities, and my cash and fixed income are quite lacking (about 4%, up from basically 0%).
Chasing returns IS the game
Chasing whatever is hot in the market may work for some, but my guess is that its a failing strategy for most.
Even most index funds are better than savings accounts
This was certainly not true over the past year.
To me that is not a saving grace , if inflation hits 4% then your 1% gains for the previous three years are toast.
I don't believe the OP has his money in a fixed-term GIC so if inflation hits 4%, the BOC will adjust their prime lending rate, and the banks will all increase their prime rates - hence higher returns within the high interest savings accounts. That said, savings accounts will ALWAYS trail since the banks will not want to lose money.
I don't believe the anyone should hold a majority of their portfolio in cash, I'm in favor of the 120-age rule for cash and fixed income, but I do believe everyone should hold some cash. Opportunities always seem to occur when we are low on cash - having some set aside can result in some really significant gains going forward.