Have to disagree with you there. Have you done a comparison year by year?
Some glaring issues already from the ones you first think of and choose to highlight:
"Here is 1996:
Fargo, Trainspotting, The English Patient" - Indy arthouse that just happened to have the luck of being the first big hit for many of the cast and crew. Yes, great films, but the art house scene is still doing this, a modern example being something like Get Out or Mother etc.
"Mission Impossible, Independence Day, Twister etc etc etc" were all pound-shop Spielberg movies that most people mocked relentlessly when they were released. None of them were considered anything more than medicore at the time.
"A mix of both popcorn and more sophisticated fare. I would also say objectively better movies. There is another 20+ I would consider highly watchable." - That you saw at the time or came to see later once the filtering of time had brought you recommendations? In 10 years who can say which of today's hundreds of movies will be recommended.
"Scream" - a standard spoof movie, a genre that Leslie Nielsen & co had already run dry, was not that exciting a prospect back then, just another spoof movie.
"1997:
The fifth Element" - Was a massive disappointment for most
"Boogie Nights, LA Confidential" - Barely anyone saw these in the cinema.
"Titanic" - LOL
"Lost Highway, Kundan" - never heard of them
"Full Monty" - Downton Abbey
"Austin Powers" - Yet another spoof movie, good film, but ignores the plethora of failed spoofs that filled the era.
"Amistad etc etc etc." - 12 years a slave etc etc etc. Also Spielberg at his peak.
"1998:
Saving Private Ryan" - Spielberg again. So are you just bemoaning there's no Spielberg? Ready Player One was actually pretty above average truth be told.
"Thin Red Line" - a bit crap after being spoiled by Full Metal Jacket, Platoon and the general malaise around caring about yet another Vietnam movie.
"Dark City, Pi, Big Lebowski, American History X" - Which barely anyone went to see at the cinema.
"Armageddon" - Pound shop Spielberg
"Truman show" - Cherry picked classic. Ironic since Free Guy released this year.
"Simple Plan" - never heard of it.
"Something about Mary etc etc" - standard romcom
"2020:
Maybe Nomadland? Tenet was a plodding affair. Nothing even comparable to half the movies from the late 90's." Tenet might have disappointed, but it blows the shit out of the 90s pound shop Spielberg wannabees of the 90s, and ironic in that Tenet is a 100% original film where as the pound-shop stuff you listed above is mostly hack reprints of 70s disaster movies and 50s sci-fi movies.
And, yes, 2020 was a pandemic year, I mean, jesus, how can you even compare that year to any other year, for any reason, most cinemas were literally shut for most of the entire year, LOL.
2021?
"Power of the Dog, Dune. Maybe 1-2 others but all highly forgettable." - you mean you haven't had any recommended to you yet. Ridley Scott would like to wring your neck (feel free to google why).
"I have excluded action classics from the early 90's late 80's from this but none of the action movies released these days are half as memorable when compared to things like the original Die Hard, Demolition Man, Terminator 1/2, Predator, True lies etc etc." - Cherry picked the 'best' of 3 big action star's movies who plied their trade during the boom years of muscleman action movies, completely ignoring the iceberg of mediocrity below them. True Lies was also heavily mocked when it was released.
"Compare the remakes/sequels we are getting now with the originals i.e. The Matrix, Stars Wars, Terminator etc." - Yeah, the sequels to those films were oh so good back in that era too weren't they (sarcasm). Have you tried Nobody, Upgrade, Eva, and The Mission Impossible and Fast and Furious sequels are doing just fine for modern sequels doing an actually good job for their fans.
"I really can't see anything people are going to look back and say wow, we had it great for movies in the 2020's. Where is the Godfather of this generation?" Weirdly enough, the only year that had a Godfather generation was 1971. I'm not a fortune Teller, I can't guess what people will be obsessed about in 10 year's time.
"I'm not convinced that it is just nostalgia at play here." - I am, except in the area of variety and the death of the mid-budget movie, which has nothing to do with what you were saying about talent and everything to do with declining cinema attendance in favour of streaming.
"Anyway, I was specifically referring to the last 2 years and who knows, maybe 2022/23 will be better." - I guess we'll find out in 2032/33 huh.