This version of Peter Parker is them mixing the stories of Peter and Miles together. These side characters aren't the characters we associate with Peter because they are not supposed to be. If you accept that, the characters are just fine as a supporting cast.
Though I agree they should just not give Zendaya's character the MJ moniker if they are going to make her so not MJ. That's like DC butchering of Superman and Batman mythos in their DCEU level bad.
Except Peter Parker is being presented as Peter Parker. He's not being presented as some hybrid character named Peter Morales, or something. He's Peter Parker. If it was a different Spider-Man, then you might have more of a point, but... it's not. It's Peter Parker.
Again, I didn't really mind Ned. He was fine for the role he was filling, IMO.
I agree that separating Michelle from the MJ identity may have made her more palatable, or at least it wouldn't be as annoying as trying to flagrantly reimagine MJ. I mean, with Tom Holland, they hit the ball out of the park. He's probably the best, most authentic iteration of Peter Parker/Spider-Man we've seen. But then they totally reinvent 'MJ' to be someone else entirely. And even if she weren't attached to the identity of MJ, she was still a lame character in Homecoming. She added nothing at all to the movie.
Perhaps if she were written to be a better, more interesting character, it would be easier to forgive her attachment to the 'MJ' identity. Like, with Aunt May, I was able to forgive the reimagining of that character in Marisa Tomei because she was actually a good addition to the movie, even in the small role she had.
Michelle and Flash didn't do that. They both fell very flat.
I thought Vulture was quite well done both conceptually and by Keaton's acting. I can't say if they'll have the same success with Mysterio/Gyllenhaal yet, and that may be a taller order than trying to adapt a character like Vulture well. I suppose we'll see.