Your points are all valid, but I think that instead of improving the combat system, they made it worse in Ultima VI and VII. Combat is important, since your characters are fighting for their lives there, and taking control away from the player in that critical moment is a very bad design decision in my eyes.
It's true they did very little to make combat more interesting, but at least they cut out micromanagement of repetitive tasks. Not the direction we might have hoped for but still an improvement. I think the bigger issue is the lack of challenge and variety in enemy design. Both U4 and U7 let you recruit a small army, but while U4 put you up against legions of evil, in U7 you're often swarming the enemy. I can't think of a single instance of being outnumbered, and everything attacks you in pretty much the same fashion.
One other issue, however, is that the Ultima 7 combat system overly favors the use of basic attacks. If you just want to attack, you don't need to do anything, while casting a spell requires opening the spell menu each time. If you want to use offensive spells as your main form of offense, that is a lot of menu opening. Furthermore, there is also the issue of reagent management, especially since no store sells all the reagents. Serpent Isle (with the expansion) eventually gives you a ring that gets rid of the reagent issue, but that game doesn't even give you the option of using magic at all for a long time.
There is another micromanagement issue: that of managing inventory and consumables. Ultima 3 wasn't so bad: there were only a few things that needed them. 4 combined everyone's inventory, but unfortunately it also introduced reagents, making spell casting much more annoying (and making the weak attack spells no longer worth it). 5 wasn't worse than 4, especially since you can at least mix multiples of spells (which still isn't as good as not having to worry about it in the first place). On the other hand, it did introduce the need for ammunition (hence why people tend to like Magic Axes; not only are they strong and one handed, you don't need to worry about running out of ammo). 6 got rid of the need to mix spells (though you still need reagents), but brought back 3's separate inventory and put a strength based limit on how much you can carry. (Also note that selling is more complicated in a not-fun way because each shop will only buy certain items.) 7 is even worse because it is much harder to find specific items in your inventory, plus feeding your characters gets annoying very quickly.
One thing I can say about the series: Every game in the series, starting from 4 (maybe earlier), has at least one siginificant flaw that its predecessor did not.