Correct. With staves now being versatile, a Land Druid can now use a shield while wielding a staff that entangles or some other special effect and have 17 AC (higher than any Wild Shape) without having to use a L2 spell slot (for Barkskin) and with Shillelagh deals 1d8+4 (if 18 WIS) which is good enough damage to compete with most of the available Moon Druid forms.

The Polar Bear does 2d4+2, so it's marginally better but costs a Wild Shape charge and potentially a Barkskin spell slot to be less effective overall. The Land Druid can still cast spells and do other things for almost no penalties.

It doesn't make any sense. I thought at Level 5 the Larian version of Moon Druid would get access to Halsin's Bear, the one that has multiattack.