I'd say Serpent Isle was the last great game
Interesting that I agree completely with half your post and vehemently disagree with the other half.
SI has a lot of good going for it, but the entire last third is an unfinished mess. You complain about UW2 being unfocused but later SI is even worse, the whole business with the Hound (twice!) makes absolutely no sense, it and other triggers are there just because they needed
something that was already in the game to activate progression so they could save development time. Even had the game been completed properly though it's just way too big and bloated for its own sake, individually all the finished parts are great, the unfinished parts would've been probably just as good if finished, but there's just too damn much of everything.
Spoony is an idiot and his UW2 "review" is conclusive proof. Half of what he complains about is literal RTFM, other stuff (like the headless IIRC) is him whining because the game gives plenty of environmental hints instead of holding him by the hand and tying his shoelaces for him. UW2 has problems for sure; honestly most of them mirror SI's, the reliance on triggers to advance unrelated parts of the plot is really bad (The Listener is the worst, but there's also some stuff with Mors Gotha; actually everything that needs Nystul to advance the plot relies on completely unrelated triggers elsewhere).
Also you got it backwards for UW1. They didn't take anything out, the game for the longest time was completely unrelated to Ultima, they shoehorned in that stuff at the very end. Considering this it fits rather well actually. In general I agree that UW1 is a better or more focused game, and UW2 certainly has its faults, but most of the things people in general and Spoony in particular point to are not it.
Crusader is pretty cool, I have good memories but may need to replay it some day, I don't think I touched it since finishing it right after it came out. Roxor is a huge fan IIRC.