Eastern Ukraine had more Ukrainians who had russian language as primary one, but they are not ethnic russians. Also this is the result of the ethnic cleansing and mass deportation of Ukrainian people russians did for the last two senturies.
The reason for Putin at this point is more reputational than inherent value of whatever lies in Ukrainian city. I fully expect Putin would nuke the ever living shit out of Ukraine into a glass worthless pile of rubble if he thought he could get away with it.