Ouendan was a lot more difficult, and more challenging to master, but there is much more to Theatrhythm in terms of gameplay 'meat'. There's a lot to do, many characters and combinations to use and level up to Lv. 99, and there's a few more different game modes too. Not to mention all the extra DLC as well.
But you're right, it isn't as good as Ouendan - I definitely prefered Ouendan to Theathythm. It was a lot more fun and, like you say, the animations and manga strips totally make the game as fantastic as it is.