Yeah I've long felt Terror of Mechagodzilla gets an unfair amount of stick from the fanbase, I for one consider it one of the best films of the "Showa" (1954-1975) series of the franchise.
Another factor I've read about is that the 70s saw a decline in the Japanese film and cinema industries due to the rise of television, leading to lower budgets which explains why the production values were no longer competitive with Hollywood as they were in the 50s and 60s. They also added blood to the fights to compete with competing kaiju IP like Gamera, as kids love things they perceive to be "grown up".
But yeah, I too enjoyed the darker and deeper qualities of Hedorah and Terror of Mechagodzilla, though I also enjoyed Godzilla vs Mechagodzilla just as good light-hearted fun.
Yeah, the decline in film budgets owing to increasing competition from television was a pretty universal issue for movie-makers everywhere. In this country, it had something of a similar consequence in that movies generally got lower (relative) budgets in the 1970s. But what was going on more largely in society seemed to make a huge difference in the sort of thematic material that film-makers responded to this new challenge with. We had stuff like the Vietnam War going on. Japan was enjoying peace and prosperity, broadly speaking. Those different contexts I think just naturally yield demand for different sorts of content, whether its produced expensively or not.
TV was a huge source of competition for Japanese film-makers though for sure. I mean by the '70s Ultraman was more popular with Japanese kids than Godzilla (and that's NOT exactly because its material was better-written and directed ). Ultraman was sufficiently popular with the kids, in fact, that they even included an Ultraman-alike character (Jet Jaguar) in Godzilla vs. Megalon just to try and bring that audience on board with Godzilla. Ultraman was a TV show. That was really the difference.
Godzilla vs. Mechagodzilla is cute. Those toy towers that get magnetically pulled to Godzilla are adorable! Stuff like that makes me laugh. But the 20 minutes or so of monster content stand out a lot as way more fun to watch than the rest of movie to me. Still, the fight between Godzilla and King Caesar on the one side and Mechagodzilla on the other at the end by itself is worth watching the picture for, IMO, although I'd rather just watch that fight separately from the rest of the movie on YouTube really.