> Would anyone else just be fine with a thick phone that had a better internal battery?

I think you miss the point of maximizing the customization of the phone. Because phones have to be in a single unit, user customization can only be done through external peripherals (vs. desktop PC where individual components can be customized).

To make the external peripherals as non-invasive as possible, the phone should be as small as possible while still being usable for most use cases. For example, if battery is your priority, get a case that has a built in external battery; many exist. Then you can have your extended battery, while a user who doesn't care about it, can have a smaller phone.