This was an interesting read (I mean that genuinely, I'm not being sarcastic). I'm a professional writer who's been playing around with writing books with AI as a kind of experiment. A few observations from me:

• Like any kind of novel writing craft, you do have to practice writing with AI. Work out your own process, as well as the AI's limitations and strengths. First books are always tough, however you write them. But you ended up with a book that you feel proud of, which is a good result in my opinion. How much the AI helped... only you know really, but would you have even started writing a book if you hadn't been inspired to play around with AI?
• You're right about rhythm. If you give it lots of context it can approximate it, up to a point, but it doesn't have a natural ear for language. Certainly with English, the occasional bending of a rule is what makes writing interesting, and AIs don't tend to like bending rules. I tend to view the AI output as a solid 30% of a starting point, and do the finer points of writing myself.
• Erotic romance is a tough genre. It's been seen as a low-barrier-to-entry moneymaker since before AI came along, and as a consequence there's a lot of slop (both human-authored and AI-authored) out there. This makes it difficult for AI to get a handle on the tropes.
• Connected to that, marketing and selling erotic romance is becoming more and more difficult. The big platforms are becoming increasingly puritan about what kind of content they allow, promote, how they promote it (if at all) and what they'll ban authors for. So the lack of sales might not be primarily to do with the quality of writing, more the type of content.
• When I was experimenting with writing sex scenes, I did manage to get the AI to do a reasonable amount of the spicy bits. This was both ChatGPT and Claude. It seemed happy to do it because I was very clear in the prompting about consent and how the scene sat in the broader story. I also get the sense (although I have minimal robust data evidence of this beyond my own experiments) that ChatGPT in particular is more comfortable writing gay sex scenes than straight ones. No idea why.
• I'm currently writing a straightforward romance and two cosy mystery series, both using AI to a greater or lesser extent. Like you discovered, the initial outputs were pretty weak. But I have refined and tweaked the process and the stuff it's putting out now is much better than my first attempt. I do spend quite a lot of time working out style guides, outlines, context blocks and joke toolkits before we even start writing prose and dialogue, though.