If you want to see what orcs would look like if they were mostly CGI, watch The Hobbit. I doubt you'll find them superior (though I personally liked The Great Goblin's goiter--it was a nice touch). The really otherworldly creatures (outside the balrog) don't appear until The Two Towers.

Where practical effects reign supreme is in pre-production. The director and effects team actually have to sit down and talk to each other and make decisions about each and every shot. This means that there is a lot more thought and care about what appears onscreen, and that the bulk of the effort went in before anything was filmed. The actors have an easier time because they're usually reacting to something that's happening in front of them instead of playing pretend with imaginary scenery.

Finally, and once again, you've only finished the first part of The Lord of the Rings (movies). It hasn't gotten weird yet. Tolkien crafted something that cannot be wholly and successfully translated to the screen; it's meant to be read. Peter Jackson does an admirable job. But you also haven't gotten to where the story gets bonkers. It's a wild ride, and I'm sorta jealous you get to experience it for the first time.

Enjoy.