Is there an opportunity to streamline the paperwork mentioned to reduce friction for founding in Germany?
But in general, not really. I also just founded a GmbH in Germany, and the paperwork really isn't that crazy, and for the more complicated parts you'll generally will want to have a tax advisor you are going to have a long-term relationship with (rather than a one-off founding service). I considered using a founding service, but ultimately, most of the "hard parts" about the process is in understanding what agency you have to talk to for what parts, which you'll have to learn anyways if you want to run a business in a way that doesn't land you in jail, so the benefits of such a service are marginal.
The only real way to streamline it would be to deregulate the process (e.g. getting rid of notary requirement).
[0]: https://www.firma.de
That being said, I do think the process could be simplified drastically. Not necessarily by getting rid of the notary requirement but 1) through digitalization and 2) by streamlining (possibly centralizing) the whole back and forth between notary (official incorporation & signing of articles of incorporation), bank (getting a business account + obtaining proof you actually put the money in that account that you're claiming to have during incorporation), local court (registering the company, including articles of incorporation), tax authorities (getting a tax ID and sales tax ID), local authorities (getting a business permit), local chamber of commerce (paying dues for mandatory membership), Federal Gazette / federal company register (submitting your initial balance sheet).
There is a reason why we have so much bureaucracy in Germany (1. because we like it) and second because it is supposed to provide trust, trust that every company I deal with is legit, trust that the system knows who is participating. Without trust nobody would make business or business would be very hard, because you would have to price in the risk of not having trust.
The downside for founders is that you have to divulge your address, unless you take additional steps to give yourself a mailbox address, but this can also be illegal if you're not careful. You can also rent an office of course, but for indie devs and freelancers, this is usually not financially viable.