[Marcus H.]

The author could had made the story a lot more interesting to see the MC and Aria take down more mundane foes(Italian Mob, Japanese Yukaza, or Chinese Triad, etc).

That's what I actually wanted. Slowly build up the antagonists and how strong the Butei are compared to organized crime groups. This would have made the Butei system shine: groups of Butei providing cover, performing recon ops, or simply doing a precision blitzkrieg at crime cells. However, all they did was to focus on Kinji and his overused Hysteria Mode.

He tried to make the SS Division (I.E magic users) to be some ultra-secret group, but practically ever female character introduced have some kind of ability

The introduction of the Choutei was the first of many mistakes of the author, the second being the removal of their rarity. I agree, there are too many Choutei running loose.

and all enemies must be spell casters which completely diminish the mystique of the "mysterious I-U" rather fast.

Sherlock Holmes must be really disappointed. He was transformed into a plot device to give Aria an additional ability. Also, the IU assigned as the series' first major villain ended up too early. Echoing your statement, the mystique quickly went away.

So there is the crux of what I am asking. Does the story get better past V4...or does it make even less sense?

After the IU, more ridiculous foes and concepts were introduced, including the Rank R (for Royal) Butei, which is supposed to be even more stronger than the Rank S Butei. This is the straw that broke the concept of Butei for good. Also, the series has long abandoned the usage of firearms since most villains have very powerful abilities that rendered guns useless.