Movement
Sunshine has the best movement, feel, and physics of the entire 3D Mario series (I have not played 3D World). It is Mario 64 refined, with the rough edges sanded off in this respect. Playing all of the 3D Marios around the same time, swapping back and forth, its really easy to tell how much Galaxy was slowed down in this respect for better or worse.
Camera
People constantly shit on Sunshine's camera controls, like it has a uniquely bad camera system among the 3D Marios. It makes me think they really haven't played Mario 64 in a long time and have nostalgia goggles on. There are many moments in Mario 64 where the discrete camera angles offered by the C-buttons just don't cut it. Sunshine is a marked improvement on 64 in the camera department. (I love Jeremy Parish, but his recent Sunshine streams were very frustrating to watch, as he struggled with the camera while singing the praises of Mario 64). That said, there are moments/Shines in Sunshine where a combination of the camera control and level design make for some extreme frustration. It wasn't until Galaxy that I think they fully ironed out camera problems, but Galaxy's level design may have helped. (We'll see if Odyssey has any of Sunshine's camera problems).
Overworld
IMHO, Sunshine had a better, more interesting and fun hub world than Mario 64. This may be based somewhat on my subjective nostalgia. I love playing Sunshine in the summer. I hope there's a Switch port someday so I can play it by the pool. The trajectory of the 3D Mario series has been to whittle away at the hub world/exploratory elements of the game until we get 3D Land/3D World. I loved 3D Land and would have played 3D World but never owned a Wii U (here's hoping for a 3D World/Captain Toad combo pack on Switch!).
Actual Levels
The actual worlds of the game I feel sometimes reach the heights of the worlds in Super Mario 64, but mostly do not. But, from playing some bargain bin/mediocre gamecube 3D platformers via Nintendont lately I'm reminded of how high even the lowest lows of 3D Mario are. Let's not kid ourselves; there are some very unfairly frustrating Shines in this game: Pachinko, Rolling the watermelon down the hill, the river of death where you stand on a leaf, Yoshi boat, roller coaster, etc.
FLUDD
FLUDD is and was very polarizing. The clean-up missions can be tedious and frustrating. Some say always having a jetpack destroys any possibility of challenging platformer design. It's a fair point I suppose, assuming the levels we got in the final game, but I don't think FLUDD is necessarily an insurmountable barrier to the talented devs at Nintendo. I personally did not mind FLUDD and actually quite enjoy it as it adds alot of immediate verticality to the game.
Story
Okay the story was kind of dumb, but at least it was something not totally a carbon copy of other Mario games. The voice acting was very bad, especially Bowser and Bowser Jr.
The game was, and remains unfinished
The blue coins, the extra shines in each world, the small number of worlds in general, it's obvious that this game was rushed out the door to help the flailing GameCube. This video from Did You Know Gaming details some of the cut content:
https://www.youtube.com/watch?v=gGpSLL1ILc0&ab_channel=DidYouKnowGaming?
There were many more worlds planned than we got in the final game as well as a train system that would likely take Mario around the island. Having this train system would have gone a long way to make the island feel like a more cohesive place. The portals we got in the final game seem like a lazy copy paste from Mario 64, which especially makes no sense in Sunshine because you can see some of the levels in the distance from Delfino Plaza and even from inside other worlds.
Fixing/Finishing the game
Complete or create the remaining worlds, blue coins now can be used to purchase vacation gear for Mario or upgrade his villa ala Odyssey. Fix or remove the aforementioned frustrating Shines. Reinstate the train system and remove the portals. Polish, polish, polish.
Wrap Up
Sunshine remains one of my, and I imagine many others, favorite Mario game despite its flaws because it is a singular, memorable and ALMOST cohesive adventure. Ive 100%ed all 3D Marios minus 3D World and its really only 64 and Sunshine that stick in my brain. Galaxy 1+2 are phenomenal games, and are together likely the best overall package representing 3D Mario in terms of moment to moment fun, fairness, and challenge. Id recommend Galaxy 1+2 or maybe 3D Land to someone who wanted to jump in to their first 3D Mario. I dont know what it is but something about the way Galaxys levels strung together disconnected spheroids to create its platforming challenges just doesnt have the staying power for me. The whole launch star mechanic is just a cinematic flourish masking the fact that you are really playing a string of (superbly designed) micro-levels. This is why Im so incredibly excited that Nintendo explicitly stated that Odyssey is the next entry in the 64-Sunshine lineage.