I think the film mostly focuses on revealing a new aspect to Laura's life, one that is only hinted at in the diary and not even discussed on the show. We see her relationship to her father, gain more knowledge (and admittedly, more questions) about how the Lodge creatures intermingle with the real world, learn about Leland's relationship with Teresa, and most importantly experience Laura's growing awareness firsthand. It's also usually pretty risky for a film to cover a broad expanse of time rather than a narrow period: it becomes patchy and unfocused. I think Lynch made the right decision in depicting Laura's last 7 days rather than attempting to adapt the diary. Yes, he touches on familiar tropes from the investigation but that's to a) heighten the tragedy, since they remind us what's coming, b) tie the film in to the show, since it feels so different in so many ways, c) emphasize how different it is to merely hear about something and to actually see it.
I agree that Laura was among the most interesting parts of the show (I would say the most interesting, which is saying a lot since there are many fascinating aspects to Twin Peaks).
As for the ratings - from what I can gather, the decline actually hit after the season two premiere, not the killer's reveal (or the weak episodes after that). Partly this may have been due to the scheduling: the s2 premiere aired on a Sunday (like the pilot) but the following episode began the Saturday-night graveyard shift that TP would maintain for months. Worst time for an audience that trended young and hip and was usually out partying at that time.
However, there also seems to have been a popular backlash against the series because it was growing more supernatural, darker, slower, and didn't seem like it was going to ever solve the mystery. Certainly there was a critical backlash at the time, with columnists who had praised the show to the skies in the spring now claiming it was "weird for weirdness' sake." Which simply meant Lynch had gone too far for them - far from being pointlessly weird, the show was drawing closer to its real sense of purpose: exposing Laura's dark secrets and the disturbing netherworld in which Twin Peaks was entrapped. That critics chose THIS moment to claim Twin Peaks was pointless is bizarre and perhaps a bit revealing.
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