Hazmat fires can't be put out by regular fire trucks, but I don't think they leave radiation behind. A hazmat fire will destroy the building - sometimes even if you have a hazmat fire truck. I would think that you're definitely losing that industrial building regardless. If you can't put it out, it will destroy the building and possibly (probably) spread fire to some adjacent buildings. In my experience, the fires that spread to the other buildings are not hazmat so you can put them out with regular fire trucks. You can't demolish the building if it's still on fire, though. I've tried the same thing, and the game is pretty adamant. You just have to let it burn to the ground and then demolish the rubble left over.
As far as reducing population is concerned, yes, raising taxes will make residents unhappy enough that they will eventually leave their residences. It's going to really reduce your happiness level, though, and you'll want to be careful to manage all the abandoned buildings it would create. Homeless live in abandoned buildings and parks, so you could create more of a problem with homeless than if you just demolished the buildings. Remember that Medium and High Wealth sims are much more sensitive to higher tax rates. You could create more space but keep the population by upgrading some areas to High Density buildings to pack more sims into a smaller area.
Since you're in the planning stage, I would suggest that if you need less sims, you de-zone residential areas a bit at a time. If there's a residential area where you are going to build a casino, leave the buildings but de-zone so when you demolish the buildings nothing is rebuilt there. Slowly manage the change, make sure you don't have any abandoned buildings, and watch your population maps - the homeless should eventually leave. You can do a section at a time so it won't create a mass exodus. At the same time, you can see how the casinos or entertainment venues will affect your population needs.
Hope this helps - Happy Building!
