I don't think this thread is an argument for why stories don't work well in games, there are loads and loads of people who absolutely do play games for the stories. I for one would not be interested in crpgs at all if it weren't for not just the stories, but the ability to influence and shape the stories. And frankly history has proven you quite wrong in terms of mixing story and gameplay. The original Baldur's Gate games are constantly praised for their stories, as are the dragon age games, Mass Effect, the most recent God of War games, the Final Fantasy series, the persona series and many others, just to name a few. You're not a fan of the abundance of story and conversation, but there's enough peopel for whom that's the point of the genre.
I agree with the folks saying Thaniel is a glorified plot device. Genuinely, if you turned him into an inanimate object, nothing substantive would change. He's not a character. Dame Aylin? She's a character. You have meaningful interactions with her, she makes choices that have impact upon the plot in some ways, she does things. You may not like her character, but she's a character. Thaniel isn't, and that's a problem because then all the stuff where we talk to him is pretty much a waste of time. He doesn't even reinforce the themes of the act, really.
Aylin literally forgets you were just responsible as DU for the death of her beloved and helps you anyways, or immediately forgets you let her get abducted by Marcus. She's as non-sensical character as one can get besides her "HULK SMASH" writing. She starts very well with her encounter with Shadowheart but quickly goes downhill as a caricature after that.
This is also true, but I think this thread points more to a systemic problem in RPGs: characters not central to the
overall game/plot are not given the same level of depth as characters that are, even though screentime and the existence of dialogue may lead one to believe these characters are more important than they actually are. Just because the plot device has a face and a voice doesn't mean the plot device is meant to have the depth of a character.
I think the issue is that he's a character that's intimately connected with the whole of the act. He's a character whose quest SHOULD be really important, an importance amplified by the fact that he's an actual character. But he hasn't been given anything to reflect the importance he logically should have.