More importantly, you're discouraged from using casters because the 5e racial imbalance is horrendous
This is so true. Wyll and Gale being standard humans really cripples them, especially given Larian's encounter design. However, I think your analysis of the problems with casters is really just an analysis of the problems with Wyll and Gale. For example, maintaining concentration on a Wood Elf Light Domain Cleric is not difficult. A Shield Dwarf Wizard has high armor class, darkvision, and good constitution for HP and concentration saves. And their are some invaluable spells in the game. Sleep, Hold Person, Pass Without Trace, etc, that make casters extremely valuable. Its not a serious problem for Sleep that you have to do damage to get them below a certain HP threshold before it will work. It still guarantees crits, removes an enemy turn, and has no saving throw. Its an insane control spell. Healing Word is another great example.
That's because wood elf and shield dwarf have supremely better racials. I mean, if the gap between races was like that of wood elf vs. Drow, fine, it's small enough. But the current racial imbalance between elf/shield dwarf and Tiefling/Humans is humongous.
Even for Charisma classes, what's the point of a Tiefling? Half-elf nets you more stats, the invaluable Fey Ancestry, and darkvision to boot.
Racial balance is really bad.
Also, as a druid playing conjure flame blade, being an elf race able to wield the Flame's Bite axe or shortswords is so much better performance wise.
The worst part is that for Tieflings, if the gained level spells were powerful enough to compensate, fine, but Drow even gain level up spells as well, on top of the insanely strong elven racials.
