Hector, What is everyone else seeing that I am missing?

I personally don't think he's incredible either, his mobility is awful and he basically soaks physical hits and thats it. He destroys ranged physical attackers, most melee physical attackers dont enjoy him either, and he's typically a pain in the butt to take out without a hard counter like Tiki (young or adult), Lilina, Sanaki, etc.
Honestly I agree though, he takes so long to get anywhere and do anything that I've usually already swept the rest of his team with Cordelia/Olivia/Nino by the time he's in position and can just plow through him with Eirika and Nino's damage. He's good against AI though and his stats are definitely strong, so yea idk. I feel the same about Takumi, he's supposed to counter flying units but Cordelia 1shots him before he can counter and gets out scot-free thanks to galeforce+dancer. I haven't had issues with him for a very long time either, but everyone says he's 10/10 best unit so /shrug

You have to approach this from the perceptive that there's no true PvP in this game, and that the arena is merely a high score contest. In that regard...

1. Hector has the highest statpool in the game and therefore has the highest scoring potential
2. He has an omni-range counter x2 which doesn't give a crap about your speed advantage, which allows for #3:
3. The AI is stupid and attacks Hector, which is the one thing you're not suppose to do against Hector

If you're playing against Hector, yes, of course its a joke, as the name of the game is "ignore Hector, go for a 4v3, then a 4vHector". But when your actual goal is the high score, you want the best possible ingredient for that high score, which Hector can make happen.

On that note, I used to also think Takumi is overrated, but as Klein v. Takumi matchups have demonstrated, it's actually justified, and not at all due to his CQC - the tiny stat advantages he has over someone like Jeorge lets him win straight duels where others would lose.

Jeorge does get a small reprisal in that he is able to come in the more common 4* version, and is therefore much more liable to be upgraded to 40(+10) over the long run over Takumi.

In defensiv team he is just to slow. Esay 4vs1 later then. Have seen that some players using him for flawless offensiv team wins. Because you want to try that everyone survive and to get max points in Arena.

Look to have a good Score in Arena some factors are important.

-LvL of your Heroes
-Everyone must survive (with each death you get penalty of ~50-65 max score points left)
-Enemy Heroes (yes you can be unlucky and get less points because enemy team sucks)
-Overall Hero Stats (not sure how it works but it looks like overall stats of Heroes give you a higher score)

Interesting fact time does not matter. You can finish the game in 5 turns or 600 turns and you still get the max points just everyone must survive in your team.

Back to Hector. If you have a good balance team be happy to kill Hector without a problem. But other have some time trouble with him.

Look you must think about it. If Hector kill just only 1 unit he has already success and reduse your max arena points by ~60.
To get the big checkpot points in arena you must get atleast +4200 arena points.

Heroes with counterattack are sometimes really hard to beat. Last time in arena i lost 1 unit because of 3 Takumi and bad map layout.

In my eyes Ryoma, Takumi and Hector can be sometimes really difficult to beat thanks to their counterattack. But to compare of this 3, is Hector really the less threat because of his mobility. I would not vote him for T1. Think Ryoma is better than Hector.