All of this is true. Rae never really delivered on her full potential.I just finished replaying and was also surprised by how much Lyriel overtook Rae as my #1.
I think the big thing that's holding Rae back is the lack of emotional growth in her relationship to MC. As the story goes on, we def learn more about her past, and she becomes more enamored with the human world, but I feel like the relationship has basically stayed the exact same since maybe their second magic training session like a decade ago.
Compare to Lyriel who goes from being completely hateable racist to best girl, and how her interactions with you have completely 180'd over time and still seems to be changing. I really think Rae is due for a big emotional step up in her story, maybe more overtly romantic or honest behavior from her.
I also think ironically she's sexually more interesting than Rae. The game really does not make use of Rae being a succubus at all, there was one brief shapeshifting montage at the start of the game and then never again. Lyriel has a specific kink that she kind of centers around (bdsm/sub play), and it's more fun to develop that with her, compared to Rae who obviously has already done everything under the sun and seems to lack any specific kinks other than puns.
Also, I would say that Lyriel seems like a girl who will be totally into, and loyal and dedicated to, the MC. Whereas with Rae... she is kind of shady and it's always pretty clear she is keeping things from the MC, has her own agenda - who knows what she is up to. For a lot of guys that is not a good look for a potential LI to have.