Communism and democracy are not mutually exclusive. Communism advocates a workers' uprising which is achieved by the working class (proletariat) and in modern society I would argue that this includes the parts of the middle class who do not run businesses. This accounts for the vast majority of people in a country and is therefore in itself democratic. Furthermore, communism advocates a form of economic democracy in which workers decide who leads and manages them, which could never happen universally in capitalism due to the private sector.
The arguments that communism "doesn't work" appear to be unnecessary, because if you believe the USSR was communist you believe that communism worked for 70 years, which is easily long enough to show that it is a sustainable system, even though the USSR was terribly authoritarian and arguably resulted in many deaths.
I'd also like to say that capitalism has taken the better part of 200 years to get where it is today. In the early days of capitalism and even today in many areas of the world there were corrupt leaders, deaths caused by excessive consumption, and the inherent flaws of regulation being impossible for all business at once.
If you want to respond to these arguments please read carefully and don't insult me because you think I don't understand.
As for your second point, I agree. That was a poor decision from the (overly concentrated) authorities of the USSR. However I don't necessarily believe that this relates to democracy - people can have few freedoms and still have processes of democracy which affect their lives.