Radagast was important for the convincing of the elves and gives Gandalf a real motive. Also it is explaining Saruman's role. I feel he's just in there to flush out the story of the 6 films.
I totally stand by this and loved the style of the film. But when a film really, really doesn't need to be 3 movies, you have to think "maybe we don't need a 5 minute scene of dwarves falling though caves. maybe that 6 weeks could be spent polishing some of the unfinished shots." The sequence you mention being done in 6…
The CGI was never meant to look "less realistic", it's more about the realities of the job... All LOTR movies had some hopelessly incomplete shots as well, because of the amount of work and lack of time. Peter Jackson also likes to come up with completely new sequences just a few months before the release, to make it even…