Your alternative to "they just don't exist" badly fails Occam's razor. Your assumptions are both far more improbable and far more numerous. That's why the Fermi paradox is a paradox:
The Fermi paradox:
If only one species masters interstellar flight (NOT FTL, but BELOW LIGHTSPEED flight), then this species will easily colonise the entire galaxy within 100 million years. Also - after it spreads to ~10 solar systems, this species is all but indestructible - no catastrophe can extinguish it any longer.
The most likely solution to the Fermi paradox is either that abiogenesis is very hard/rare (which is heavily supported by the staggering complexity of the simplest molecule that can reliably self-replicate) or that technological intelligence is very hard to evolve.
Or terraforming is a hell of a difficult task and these civilizations didn't manage.
Or they colonised our galaxy, but our biosphere was toxic to them so they skipped it because sterilizing a planet was immensely more difficult than terraforming one.
Or our biosphere was toxic to them and they died.
Or they sterilised every place they found, so only those who didn't encounter them survived.
Or they had ethical concerns regarding coming here.
Or they prefer red dwarves because of their longer life.
Or they prefer O'Neill colonies around rogue gas giants where they harvest fuel for fusion.
Or they calculated a more efficient way for survival.
Or the time scales for galactic colonisation are largely exaggerated.
Or the development always needs a few billion years at least, and we are one of the first.
Or their planets became uninhabitable before they reached space.
Or Congress never got to approving the funds for an interstellar mission.
Or they waited too long and their civilizations went into a decline.
Or they actually have a subsurface civilization on Mercury and Enceladus right now.
Or all of the above.
I fail to see how can something be a paradox when it relies on too many assumptions in the first place.
Which congress didn't approve interstellar missions? All the congresses belonging to all the hundreds/thousands of civilizations that a single species will create during its history?
All the leadership apparatuses that lead every single species which existed? Talk about uniformly minded aliens - aren't they supposed to be phychologically and physiologically very different?
All these very different species, evolved with different psychologies, different cultures didn't have the curiosity/waited too long/went into decline? Talk about improbable.
Why terraform? Build O'Neill colonies or Banks' orbitals.
Of course, if you want to terraform due to a quirk of yours, you can - we KNOW it can be done; it only takes a lot of time.
If they colonized entire solar systems, we should be able to see the reflective surfaces/megascale constructions/etc/in nearby systems, even relatively small scale alterations - for some time now.
If only one of these many species colonized the entire galaxy - aka they had the capability and time to do it - we should definitely see them, their other achievements.
But the galaxy, we observe, is virgin, untouched by intelligence in all its details we see.
Unless all these species, much like unicorns and fairies, are always hiding - all having the same imperative at not being seen (building subsurface civilizations on wherever). Yet again, improbable.
100 million years is MORE than enough time to colonize the galaxy with ships only able of 0,1 lightspeed - 100 times more, to be exact. Life could have formed in the galaxy since 6 BILLION years ago.
Enough time to colonize the galaxy many, many times over - by many, many species. And none of these species can just disappear - there's no disaster that can do that, short of another galactic species - which will remain in the galaxy.