Your summary is pretty close to my thoughts. The dish certainly does need the fresh chilli in it. I halved the amount on the first go just to be safe and felt that it was still mild.
As for the whole spices, I guess being whole they don't deliver anywhere near the level of flavour they would do ground. Contact surface area perhaps?
I had a cinnamon stick fall apart in the pilau I did yesterday and that certainly delivered higher levels of flavour.