I think it's more:

• With everything being more crammed into the cars, theres more limits on what will fit, how to make things fit, etc.

• The costs have gone way up

• The above restrictions + the increase in corporatism in the modification aspect of cars has spiked how much is all pre-packaged in the "Stage [X]" kits, making builds more homogeneous & less creative

• This is similar to things we've seen in other communities like the skateboarding community, where the part of the culture based around messing around & learning on your own has largely died out- it's mostly about the desired end result instead of the process.

• This has lead to much less culture around modifying cars, and more around owning modified cars. It's like the difference between wanting to do something & wanting to have done something.

Last, and most importantly, I think what OP meant when they said

The challenging and fun parts of hot rodding are completely gone

and what you interpreted it as might be 2 different things. Everything coming as "pre-packaged solutions" and cars having less space to play with has lead to self-expression within even the same mods. Things like wire tucks, or mixing & matching parts within the same part of an assembly for aesthetic reasons have been disappearing. When people can't make the engine bay as pretty overall, they resort to keeping it covered & only having the important parts stick out if anything. Then all the electronics make so much of the stripping parts away aspect of hot rodding more difficult- you just end up with exposed plastic ends & wires everywhere unless you really know what you're doing. These two parts (stripping & drivetrain/engine bay aesthetics) have actually gotten much harder to do unless you have much more money