Three Houses story would have been a massive let down let for me if it was made by any other game developers but its pretty much what you'd expect from IS at the point. Three House may be more ambitious then some of the previous titles but that just open the narrative up for more convelution. I'd like to mention the only route ive played is Verdant Wind, the rest I've read sysnopses on but the finer details are lacking. TheI'll start off by listing the main problems.
First up we have Byleth who's the worst rendition of the Avatar IS could possible come up with. Byleth neither allows you to imprint your personilty on them or offers an intersting personality of their own. Essentially you get the worst of both world here with Byleth's lack of personility being their personality. Through out playing the game my main thought was the story would funtion allot better wuthout them. The three lords are interesting enough in their own rights there's no need to take the spotlight of them to give this non character a chosen one story.
Secondly Rhea and those that slither in the dark being imortal beings playing 4D chess for 1000's of years or takes away the agency of the main charcters. Havign the entities takes makes the main charcters seem small and unimportant. The story would be much more grounded if Rhea is just the Pope and TWSITD are just a cult who try to manipulate Fodlan in the shadows.
Thirdly the routes lack logical alliances. There is absolutely no reason for Dimitri to attack Claude in VW but he does anyways because the plot wants a three way. Ethier give the charcters a reason to be pitted against each other or have the natural alliances form.
Now what id have done differently.
First of all would change Byleth from the chosen one to a regular mercenery. The plot wont centre around them and their importance around in the story will be based on thier combat skill, leadership and tactical ability rather being the second coming.
Secondly would change the Fodlan's backstory to be more similar to lie. Nemisis was an Almyran who conquerd Fodlan and enslaved their people. Seiros and the ten elites were blessed by the Goddess with crests and given holy weapons to fight back. After defeating Nemisis Seiros is then pronoucned Queen of Fodlan. Generations later the descendents of the elites fight over Fodlan ending with the territories being split and the Church of Serois being founded to keep the peace.
I would give the main lords conflicting goal. Edlegard want to take over Fodlan and get rid of the church. Claude wants to be King of Fodlan and Almyra and wants to open up the border, despite not beleiving in the religion hes happy to use the church for his gain. Revenge will be Dimitri's main motivator but when the war breaks out he also doesn't want to let either of the other two lords to rule over the Holy Kingdom of Faerghus. Rhea's just a regular Pope who belives the church is needed to keep the peace and spread the good word on Seiros.
I'd also change the Leicster Alliance structure. They're just an alliance of inderpendent lords, some more powerful then other but no leader.
Would change White Clouds by dropping the Flame emporer. Have the plot revolve around disgruntled nobles without crests led by Miklan and unhappy with the central church and and the value they put on crests. The are supported by the Western church who also dissagree with the central church. The conflict will culminate with Milkan gathering his forces and leading an attack on the Church only to be defeated. TTSITD will be a cult of extremists that perform crest surgeries to keep the bloodlines of the noble house pure. They'll have little precesnce in the first act and mainly be invloved in the second.
Edlegard wanted to side with Mikklan but couldnt as he wasn't the empress yet. She bides her time and builds up the empires army until her father dies and she ascends the throne. Then she launches her attack on the church. She then attacks the Holy Kingdom as they wont stand for the church being destoryed whilst the Leciester lords swear fealty to Edlegard. It isnt until Claude comes out as the heir to Almyra and brings Almyran forces that the leicster lords swear to him. Dimmitri barely survives the attacks on the Kingdom but is saved by TTSITD. They brainwash him into a crazy revenge machine against Eddlegard as they can't have their beloved crest system destoryed.
I'll write the rest up later, as I haven't got all the details figured out yet but overall I'd say that set up the conflict to more balanced and doesn't pile everyone up on Edlegard.