Would a slower speed and lower altitude reduce fatal incidents?
I'd like to answer this question by debunking the premise of the question: that most plane crashes happen when planes fall out of the sky, and that it's like rock climbing where the higher you are, the more likely a fall will kill you.  While it sounds believable, it's almost entirely false, and since it isn't diving out of the sky that kills you, lowering the altitude doesn't really help flights become safer.

Planes don't need speeds of over 300 mph/500 kmh ground speed to be deadly. A car accident for comparison is generally considered to be very likely fatal above 80 mph/130 kmh  (source: DFT London).  Even plane crashes at takeoff and landing speed of around 150 mph/240 kmh can be difficult to survive just due to physics. Every one to three years there's a plane that crashes on takeoff or landing with almost no survivors like TransAsia 235. The most deadly accident ever happened when two planes collided as one was going about 160 mph/260 kmh and the other was almost stationary!

Even if you could easily survive a 150 mph/240 kmh collision, a ground speed of 500 mph at cruise doesn't mean the plane would crash land at 500 mph. Planes don't just dive out of the sky, gaining speed to 500+ mph/800+ kmh (except in total structural failure and breakup, but then you're a goner even at 150 mph). Even in extreme circumstances like loss of all flight controls in UA 232 the aircraft could slow to about 250 mph/400 kmh before crash-landing.  The "Miracle on the Hudson" aircraft slowed a lot after engine loss as it descended towards the river.  Even the dive of Alaska 261 caused by jammed flight controls could be slowed to about 250 knots using air brakes and flaps.  So the actual crash speed for high altitude incidents is usually less than 300 mph even in catastrophic incidents, which you could easily also achieve after an incident at lower altitudes and speeds.

Any serious changes to aircraft have to make enough of an improvement to be worth the disadvantages involved.  When we're talking about things like making flights slower, that's a serious disadvantage.  Probability per flight hour that an engine or flight controls will catastrophically fail is small but very real number in hazard analysis and so longer flights have a higher chance of an incident.  If the cruise portion of a flight takes twice as long, is that portion now twice as safe per minute to compensate?

Edit: As Martin James and Milwrdfan have pointed out, flying lower and flying slower both increase the amount of fuel you need per trip, which lowers the amount of passengers you can take.  This would increase the number of planes in the air which would probably decrease safety per passenger as well.

Finally, the most dangerous parts of a flight are takeoff and landing. Nearly half of accidents occur during final approach and landing, and only 10% occur in cruise (source: Boeing).  If the past few years are any indication, you're about as likely to have your plane damaged by terrorists as to crash during an incident in cruise.  So you're making every flight lower and slower to help less than one accident per year.

Now that this is the accepted answer, I should point out that Dave has some very good points in his answer about the particular dangers of lower altitudes like weather and glide distance. 

So in summary, the premise that cruising at 150 mph and 5,000 ft AGL is relatively safe, while cruising at high speed and high altitude is relatively dangerous, is a faulty assumption. So you don't have much to gain by lowering the speed and altitude.