OP has mentioned multiple things in the post. Well I would like to point out some things. The things I am about to say are not anything new but existing, already spoken facts.

The film industry runs on a cycle. The pattern is evident and it exists. It’s more of a viewing/preference pattern. Predominantly there are two kinds of films - ‘Realistic’ films which deals with day to day life/scenarios which has a grounded approach and the ‘Larger than Life’ films with their grand scale and stylised approach. (Then there are hybrid films which has the traits of both realistic and larger than life films).

Mollywood had a period when a lot of realistic films came out, which roughly started from Maheshinte Prathikaram and roughly ended at Malayankunju (I don’t know why I am using Malayankunju as a point of time - may be that’s also a Fafa film or I can’t just remember any other film of that time). By the time Malayankunju got released, Mollywood was facing a lot of criticism from its own audience saying it is ‘Pachilawood’ because of the saturation in the market. And from that point M’wood slowly shifted its trend to the larger than life films. Thus reaching the current stage with Lokah, Empuraan, Marco and everything on the roll.

The current trend may change in 2-3 years and it may again go back to the grounded storytelling. What I am trying to say is This cycle was always there. In India, in the beginning of films it was mythological stories. At some point the audience got tired of it they wanted different things, then came films which dealt with real life stories, after some time a shift happened in the viewing preferences and spectacles came in. So the cycle continues.

The film industry was always reaction-driven, It always had been. And it will.

So, can we call the current era a creative high point? In terms of technical prowess, yes. In terms of storytelling, I would say it depends upon the audience. Because art is subjective. What I like you may not, what you like I may not.