"the functionality of Messages is much worse than Google Hangouts, the messaging system it's slowly supposed to be replacing."
I'm not sure that's 100% accurate, but it is a confusing mess of services and associated apps.
In my view, "Messages" is more of a stock SMS (/MMS/RCS) app that is designed to be used on a stock device, or to replace (often crappy) carrier-built apps, or other "skinned" apps that get included with random brands of phones. It's an option to use a "standard" app that isn't built by the phone maker, carrier, or some shady app from who knows where. That's really all. I don't think it was ever meant to replace a web-based chat system such as Hangouts, or anything else.
Hangouts CAN still do SMS *if you have Google Voice* (or Fi, I believe) although, they prefer you use the Voice app for that.
So, what they're doing is separating things into areas that work for each service.
For carrier SMS, "messages" makes sense. A "stock" app. Better than your carrier-built one, probably. So, now this beams the data to/from your device to a web portal? Weird, but whatever. Kind of neat, I guess.
Hangouts. Ok, yeah, that one's a little confusing. They don't want you to do SMS with it anymore, though it *can* for Voice / Fi users. It is *primarily* a web chat, which is its base functionality. Taking carrier SMS out makes sense to me, actually, even if it did fluster many people.
Voice speaks for itself. Have a GV number? Use this for voice and SMS. Is that Voice number your primary number? You pretty much HAVE to use it. Is it secondary? That works, too.
Honestly, this has been perfect for me. Yes, I still have SMS messages floating in Hangouts. Need to clear those out, someday. Voice is my primary number, so I use the primary app for that to call and text. I still use Hangouts randomly for some people to chat with, but I don't rely on it for texting anymore. It's nice to have as a backup for voice and SMS functions, but I never found it great at those things.
Project Fi? I'm no expert there. From what I understand, they've left Hangouts as something that can integrate with it outside of "carrier" level things. So, you can do calls and texts with Hangouts, similar to how Voice can talk to it as a "secondary" method of using the services.
Would make more sense to me if they just used Voice for "phone things" like calling & texting and left Hangouts to only be a web chat thing like a Slack/Skype thing with the Skype thing being able to get a phone number associated with it for either conference calling or as a direct-dial.
The rest? I don't know. Didn't know G+ even still existed except as a Geocities-like world of abandoned web things. I'm sure its underlying chat is probably just Hangouts.
So yes, it is a confusing mess right now. I think their separations make sense, and that they'll get more of it sorted out in the next couple years. For now, this is a "neat" thing for their Messages app. Kind of useful, I guess. Not world-changing, but interesting. For those who do not have Voice (or Fi), and can't text via a browser, this kind-of lets people see how that can work. Granted, T-Mobile can also do this, and Verizon has had something similar for some years.
None of it is that great, IMO, compared to fully decoupling the number and porting into Voice. That has honestly been the most liberating thing to not care very much about the carrier and be able to use that number on any device if needed.