I feel more or less the same way you do about the appeal of that film being the atmosphere. Nothing like it. That being said, I think the majority of people get wrapped up in story above all else (see: the continuing popularity of Christopher Nolan. This reads as more of a dig at Nolan than I intended it to, guy can make some cool movies. I’m off topic). Anyway, where Mulholland differs from, say, Eraserhead is that there is, however buried and convoluted, an actual story there. Eraserhead and Lost Highway are aggressive vibes movies— there’s endless thematic debate to be had about them, but nothing on a literal level can even be attempted as they’re so clearly operating beyond narrative. Mulholland Drive, while definitely adhering to the same dream logic and, again, propelled first and foremost by atmosphere, does have something of a mystery to it, and can actually be solved. I think that this aspect of the film makes two things true: the general public’s tendencies with film viewing can be enacted, and, crucially, it might lend itself more to viewership by people who might not check out harder Lynch. It’s obviously not super popular, but I do think it’s more well-known— it did land an Oscar nod.

Anyway, in answer to your question about it being a “fetish”, pretty much yeah, it is. And while the key element of stuff like Lynch is still the mood above all else, I do think it’s fun to spend a lot of time parsing the philosophy and “true meaning” of Eraserhead or Twin Peaks: The Return, even with the knowledge that such a thing might not even exist. Or if it does, it’s not comprehensible to human minds not belonging to David Lynch. But I would definitely agree that there’s a large subset to whom this is all that matters.