CoI is excellent while LoI is one of the best games on the system. I don't understand how the third game took the series from the pinnacle of the SMS to a wonky platformer with a black bar filling 40% of the screen. I blame the Game Gear.
I've not played Legend of Illusion (I'm guessing this was one of those Nordic country and Brazil only SMS releases). But the first two I found to be excellent on the SMS. And agree with your assessment.
Sonic SMS is a great 8-bit game. Sonic Genesis is a great 16-bit game. Both versions showcase their hardware perfectly. Can't really compare them.
I wouldn't say they showcase their hardware perfectly, but I would agree that they're both great games.