I do try and make Hangouts work for me. I ring my brother using Chrome on my Mac and he doesn't get notified.
My other brother will send messages to me via Hangouts from his phone and it doesn't appear on my phone (running Talk), and won't appear as a notification every time on my tablet (running Hangouts). Only when I log into Gmail on my laptop do I get a popup regarding the message. This makes it unreliable.
I also attempt to video call my family from my tablet using Hangouts - they don't get notified, either those running Talk or those running Hangouts.
I try ringing them from my laptop and they don't get notified.
If I call my brother from my phone running Talk, he gets notified. If I call my brother from the SAME ACCOUNT on my tablet running Hangouts, he doesn't get notified.
Your understanding of online/offline is different to mine then. If I am talking to someone next to me and they walk off, knowing when they were last next to me is of no use to me if I wish to continue talking to them. I need to know that they are still right next to me.
This is the way it used to behave in Talk and also the way it STILL behaves in Gmail chat, just NOT Hangouts on mobile. Hangouts tells me when they were last seen yet lists everyone I know in the contacts list. It would be far far far far far more useful to show those that are online NOW, not were online 2 days ago in my list. This is the way IM has behaved since I don't know when: for examples, see MSN Messenger, Yahoo! Messenger, Google Talk, ICQ, face-to-face conversation etc. etc. etc.