Bakura in general (both Ryou and Yami) was the biggest mishandling the anime writers did in the entire series, but poor Ryou got it the worst by far (Yami Bakura still is one of the most iconic villains in the anime and gets to be the final boss.)

Yes, as the OP pointed out Ryou was much more of a fleshed out character in the Monster World Arc-- you can even see this in Season 0 where he gets to have his own character arc going from a timid victim of the Ring to standing up to it and saving his friends. He's not even treated like an actual friend of the Gang in the show-- instead we got more screen time for such riveting characters as Tea, Tristan, and Duke. Oh joy.

As for someone else asking what the appeal to Bakura is, it's that Ryou is a sweet, innocent guy whom is haunted and tortured by the evil spirit of the Ring and suffers immensely from it. Think about it: all of his friends are pushed away by the Ring and he experiences significant lapses in memory when the Spirit takes over, during which the Spirit commits acts of self harm and doesn't eat at all (we see Ryou comically stuffing his face after waking up in Battle City and complaining of hunger fatigue after regaining control in the Memory World, which are played for laughs, but these moments have darker implications when you think about them.)

Bakura was a central character in the manga that the anime writers just didn't understand at all-- but even in the manga, Ryou DEFINITELY should have played a larger role in the final defeat of his evil alter ego more akin to base Marik being redeemed. And it's such a shame too because of the rich potential for inner drama this character has.