Gundam SEED has a lot going on in the character development department.
Lacus, for instance, starts off as a kind of repulsive wad of bubblegum with too many Haros and a terrible outfit, and by the end she has a solidified ideology and a plausible relationship with Kira, and looks like she belongs in the same frame as the rest of the characters lmao.
Kira has to fully alienate himself from his friends in order to achieve the higher level of consciousness, and conscience, required to win over Athrun.
Athrun is a very straightforward case of "I used to think following orders without question was chill but uhhh." But also I think his tenuous connection with Lacus, whether due to some duty to his arranged engagement or actual care for her (bit of both, prob) being released as soon as she forces him to confront his own beliefs made them both soo much more interesting. Of course that does open him up for Cagalli, which uh...
Look, Cagalli is cool, but she kinda doesn't have an arc. Shit just kinda happens around her. Even her relationship with Athrun just occurs, absent any chemistry. They had more going on when they were trying to kill each other. Oh she has a twin brother now, oh she's a pilot now, oh she and Athrun are whatever. Sorry queen, you deserved better.
FLAY ON THE OTHER HAND. Girl. She started low but only when she hit rock bottom was she able to look up and see the shape of her downward spiral and IMMEDIATELY went to work trying to fix that shit. She did kind of a mediocre job but she did get killed before she had a chance to make progress but GODDAMN.
Many of the secondary characters were good too. The will-they/won't-they dynamic between La Flaga and Ramius was cute. Mirallia going from trying to murder Dearka, to tolerating him, to actually being friendly toward him was excellent. Sai, of course, dealing with the betrayal by his friend and his partner, eventually just gets used to it, before he is no longer a speaking role.
It's honestly spooky how many named characters live but stop being characters. Even the mechanic in the Archangel's mobile suit hangar, once very loud and talkative, eventually relegated to unvoiced montage shots. Why couldn't it be the Raider pilot who speaks only in gamer references? Shut this man up.
I like that it took a long fucking time to get Yzak to chill out. Sometimes a character arc is a gradually increasing status effect that only procs when the bar is full.
On to SEED Destiny
