The Appendices to the Extended Editions of the LOTR trilogy are well worth viewing (at least for myself, I don't think they would be for
Inzil 
). It explains a lot of the decisions Jackson & Co. made. I disagree that some of the character alterations were necessary, but it does show the time and care that was put into the LOTR films. I see what
The Sixth Wizard means with "the spirit" argument, you get to see how everyone involved in the making of the films was a part in their success...from Alan Lee's and John Howe's involvement, Tom Shippey and Christopher Lee, set design, the bigatures, costume design, just the years of planning and pre-production that went into it...etc.
I don't agree with Faramir's alteration, Théoden's, Frodo's and some others. But I do understand the reasons for Denethor's (I don't see the need to have a scene with him being a slob). There was going to be an EE scene revealing Denethor also having a palantir, but ultimately it was removed even from the Extended because there just wasn't sufficient time to establish why Denethor has a palantir as well. Jackson didn't want to give the impression he was in league with Saruman and Sauron, but that he was a noble man that has been beaten down with grief by the death of his son (sons) and hopeless situation. In the end, it's got to be about Aragorn's arc becoming the King and saving his people. So an over-the-top portrayal of Denethor makes sense given the limited screen time and where Aragorn's arc has to end. He's clearly caricatured as a mad man, but the reasons for his madness are the same as Denethor's decline in the books...grief, despair and hopelessness.
Boromir's scene with Aragorn in Lothlorien is one of my favorites..."My father is a noble man, but his rule is failing. He looks to me to make things right." (Then Boromir describes the White Tower of Ecthelion, which is a description lifted right from the books..."Glimmering like a spike of pearl and silver...etc). But it establishes Gondor's desperation and need for the King's return.
In the movies, Denethor's motivations for not lighting the beacons is stated as "Do you think the eyes of the White Tower are blind?" He knows Aragorn is with Théoden and he "will not bow to this ranger from the North; last of a ragged house long bereft of lordship."
Denethor sending Faramir off on a death mission to retake Osgiliath. Gandalf's call out "Your father loves you Faramir. He will remember it before the end." And in the Pyre scene, Denethor shouting "You will not take my son from me."
So, overall, Denethor's decline into madness, while being over-the-top is caused by the same reasons as the books. He becomes tainted by politics, grief and despair. I think the one mistake they made with him (besides his eating habits), is I sorely miss the exchange between Faramir and Denethor (in the books)...when Faramir reminds his father that it was he who gave Boromir leave to Rivendell, and Denethor's reply "stir not the bitterness in the cup that I mixed for myself."
(The Siege of Gondor). Such a wonderful line from the books, that I think John Noble could have pulled off masterfully.
I've said enough about The Hobbit trilogy being bloated, rushed, slapped together with CGI, it doesn't come close to the time and care that was put into the LOTR films and it really shows.