Fellowships are meant to be a way to find like-minded players interested in the same things. People meme them but they do get used for that and people do regularly find like-minded friends to play with using them. For example, they have been used to find statics, recruit for new discord servers or linkshells, find people who speak the same language, get tanking advice, advertise discord servers. They fill up to 1,000 quite quickly and new or casual players do engage with them even though veterans meme them.

CWLS doesn't have more slots for the same reasons as everything else being limited. Either you can't carry around more data without it causing problems for the server, or there is a lack of disk space.

Local linkshells mostly died out because of discord, but they are still used for hunting and you can start one next to a calamity salvager.

The reason that linkshells and CWLS have a different menu seems to be because linkshells had too much spaghetti code.