I agree about the mass effect system in general, although the system in Mass Effect 3 removed the problem of having to be either/or. There were renegade, paragon, and neutral responses, all of which contributed to your ability to persuade with either diplomacy or strong-arming. This was ok. It's better not to even try to divide reputation up this way. Dragon Age 2 focused on each individual character's relationship with the protagonist, which I liked, and which is more alike to obsidian's influence system in, say, Kotor II or Alpha Protocol.
It would match up with reality better if each character's influence system were a little bit different.
The way a writer might do this is to start with the story arc - outline the most important events, the details of their personality, and some ways in which the player will play into that. Then you would decide, for each character, how the influence system would work for each incident and in the greater story arc. Some characters will love a PC that is funny; others will be unimpressed until they see them make a key action that proves their worth. The rewards would, accordingly, be different. One would have a very large boost for a handful of events, and the other would have lots of little boosts to their friendship with the PC, but they might or might not take the PC as seriously.
While it's useful to have some idea of the effect you're having on a character, it's better to replace that with or add that to a character story arc that already makes sense, so that the player has a sense of the character as a truly separate entity. I feel that giving all characters similar boosts for every decision, more or less all equal, is a little flat - to go with the fact that giving gifts is more or less constant, as well as a little 2-dimensional. As if the character development is a game mechanic.
Ok, well. It's a little late, so I hope that wasn't too blabby. I could probably go on all night about this, ha.