I agree with you about Welles. It seems as if the picture got better once he entered.
In my opinion, it would have been better if Harry Lime (Welles) was established as a main character in the first 15-20 minutes. Give him some substantial screen time, then "kill him off." Then have Cotten arrive and investigate, eventually finding out he's really still alive. I think the off-screen death really hurts the story...we have no reason to care about what Harry Lime does or what he means if he remains vague for most of the picture's running time.
But if we get to know Harry, then shockingly see him "die," we are on the same emotional level as Cotten-- tricked/fooled just like he is. That would make Harry's re-emergence even more spectacular.
As it is, the whole thing is just a series of gimmicks and it's very unsatisfying. It's one of those rare 'classic pictures' I like less with each subsequent viewing.
"You've had a few hours given back to you from life. A few hours in which to change your minds and your hearts. When you came into the grounds of this inn, you came into a place as it was a year ago today. You were in your own time, but the house and garden and Gwyneth and I are in the time of last year. The day the bomb hit. When you go away and walk up the road you will have spent a night in an inn. But if you look back from the crest of the hill, the halfway house will not be here...but if you remember, it will be as you remember a forgotten snatch of song. It will be a picture before your eyes. Gone before you realize it is there. Or an echo in the hidden places of your mind. But you have been here...and the world is what you make it." -- Mervyn Johns, THE HALFWAY HOUSE.