Frankly, the fact that 5 massive fleets of Dominion Ships were allowed through the Wormhole before Starfleet decided to do anything about it has really irked me.
Imagine if Canada signed an agreement in which they would essentially become a vassal state of China. Do you think the United States would be alright with Chinese tanks, planes, and troops marching through Alaska get to get there?
Of course not.
War was very clearly coming. The only problem I have with the Dominion War arc is that the Federation didn't respond sooner and with more intent to
win.
-Withers-
As I said, the Federation's actions were, at times, appeasement. REALLY BAD ideea when you're dealing with someone determined to conquer you.
Middle S5 - Sisko tries to close the wormhole. This fails. Until end S5, the Federation could have closed the wormhole. It didn't, allowing the Dominion to send fleets in the alpha quadrant. Whoever made this decision was an idiot.
Then the Dominion slaughtered all the Federation CITIZENS from the demilitarised zone (only a minority of which were maquis).
The Federation did nothing, betraying its obligation to protact its citizens. You see, the Federation has not only rights regarding its citizens (such as to punish them from breaking its laws regarding...terrorism, let's say) but also obligations (such as protecting its citizens).
If I were part of a Federation member state, I would ask myself why am I still part of the Federation, if the Federation would abandon me to die so easily.
Whoever made this decision betrayed the federation's principles and its citizens. He's a traitor, pure and simple.
First off, they tried to collapse the wormhole at mid-S5 as you said, but because of the sabotage by changeling Bashir they made it stronger, both against their fancy safe-for-Prophets plan and regular weapons. That would be why they didn't collapse it later, as was clearly stated in the episode.
Second, it was never stated that the Federation colonists were slaughtered, just the Maquis. This probably included civilians, yes, but they had all renounced their citizenship and quite frankly were idiots for settling there in the first place. Maybe next time they shouldn't settle in disputed territory. Asking the entire Federation to go to war just because a few hundred people refuse to be relocated or just mind their own business inside the DMZ is silly.
Finally, we have no idea if the Federation was ready for war any earlier than when they started it. In fact, I would say that there's a good chance that they would have been crushed if they were stupid enough to attack that first fleet heading for Cardassia. Not only would they have lost six months of time to build up their own fleets, but chances are that they hadn't finished creating a way to make their shields against Dominion weapons. That's why the entire Klingon fleet got kicked out of Cardassian space. Weyon specifically states in "A Call to Arms" that up until then, Federation shields had never worked against Dominion weapons. It'd be a bit stupid to start a war before your shields work.
I'd also like to point out that the Federation launched the first strike in the war as it was. Blowing up a major shipyard before war's even been declared seems like being proactive to me.
First - between middle S5 - end S5 the wormhole could have been blockaded by a large Federation armada, weapons platforms, mines, etc, etc.
Second - It was established that the dominion killed every man, woman and child from federation colonies found in the demilitarized zone. Saying that all are maquis is non-sense.
Them renouncing their federation citizenship means that they are a separate state, no longer bound by Federation treaties. This means that the Federation has no right to hunt them down as criminals, terrorists - at most, they are enemy combatants, defending their country. Each time the Federation hunted them down as terrorists for breaking its treaty, the Federation confirmed the colonists's status as federation citizens.
And then, the Federation let them to die without lifting a finger, hypocritically betraying its obligations towards federation citizens, after it continuously made use of its right to make them obey its laws.
The Federation doesn't want to fight wars for the colonists? Well, then the Federation doesn't have the right to hunt them down as criminals, either.
The Federation wasn't ready (after it had ample time and to prepare itelf) for war? It doesn't change the fact that the Federation betrayed its citizens, let them be exterminated without iofting a finger (the klingons

did more to help the colonists) because 'it wasn't ready'.
Third - proactive behaviour? After half a season of painfully idiotic appeasement? After the nazis attacked france, France acted proactively in defending itself, too.
First thing the Dominion did - they detroyed New Bajor, killing every single colonist there. In other words, they comitted GENOCIDE.
No they didn't. They killed every Bajoran on New Bajor, not every Bajoran; nor did they try to kill every Bajoran, so genocide was not committed. Semantics? Yes, but I think it should be pointed out.
Cute.
Vanyel, to use an obvious example, the nazis only killed jews from the occupied countries, not all jews in existence around the globe. Does this mean they did not commit genocide

?
"The Dominion was not interested in peace - and this guaranteed there would be no peace:
First thing the Dominion did - they detroyed New Bajor, killing every single colonist there. In other words, they comitted GENOCIDE.
Despite the fact that they knew the bajorans/the Federation didn't even know of the Dominion's existence much less of its territory.
Despite the fact that New Bajor/the wormhole most likely was NOT in dominion territory.
Then they try to infiltrate a spy and they attack and destroy the Odyssey (which was retreating from a rescue mission).
Then they attack the Defiant (on a diplomatic mission) and subject the crew to a simulation "what if we attack the Alpha quadrant?".
Then they try to start a federation tzenchety war, they DO start a klingon cardassian war, various other acts of terrorism, they try to nova bajor's sun - killing BILLIONS.
Finally, they start open war.
The war was not caused by the Federation exploring the Gamma Quadrant or by Dax saying this or that.
It was caused by founder paranoia - as soon as they heard of the Alpha quadrant powers - too powerful for their paranoia - war was inevitable.
If anything, the Federation erred by showing appeasement tendencies in its behaviour vis a vis the Dominion."
I think that you're right and the Dominion was not interested in peace.
However, the Federation never had to send in any ship to attempt negotiations, a communications beacon could have done just as well.
Actually, the Defiant's mission was to find the dominion's leaders and attempt negociations - DS9: The Search. And the founders, with certainty, found this out.