I agree that when I think of unique characters from TOH Hooty is way ahead and I also know that he is the Owl House and I love his friendship with Lilith but I think everything would be possible without him too.
The Owl House would still be the Owl House because of Eda's owl curse form and Lumity could have happened without him too.
There were also scenes where he was very annoying - even the series characters were annoyed by him - and we have no information about his (back) story, which is why I find Hooty as he is now in the canon pretty boring/overrated.
I guess he could have been more interesting if we had seen more episodes but I don't judge something that isn't there and stick to the canon.
This is just my opinion on Hooty and other opinions are of course respected.