I don't think her character really had much room to be anything substantial. All essential roles on the ship were pretty much taken up! The only way I think Kes could have been given more prominence is if she and Neelix truly coupled-up. Married. What have you. And then her role would expand beyond being the doctor's nurse.
Incidentally... why didn't they ever create a Nurse hologram for the Doctor? Seems like they made a fairly decent attempt at a backup doctor, so a nurse would've been so much easier. Anyway... Kes was the doctor's nurse for a while... and then Kes started venturing off in her telepathic explorations with Tuvok. If she was with Neelix, I could see her working in the mess hall cooking and serving with Neelix. Maybe even going on away missions with him.
But... the Neelix/Kes couple wasn't to be. I think that marginalized her. Jennifer Lien wasn't a stellar actress, but I think she was OK as Kes. It was all about what the writers could come up with. And I think they struggled a lot with this. 7o9 was the "series reboot" point. And, if she was to become the focal character, she'd really overshadow Kes, marginalizing Lien's character even further. So... it made sense to dispense with her. Kes and 7o9 couldn't co-exist.
I strongly disaagre here.
I see a lot of potential in Kes. A lot more than Kim and Neelix have. And I don't see a kes-neelix relationship as the only way to keep the character.
As a matter of fact, Kes really started to develope as character when she and Neelix started to drift away from each other. As a telepath and possible ship counselor, Kes could have had a lot more screen time and develope into an even more important character than she was.
I can take some examples of character development from two of my favorite series, which are NCIS and NCIS LA.
The most prominent example is Nell Jones in NCIS LA, a character which sometimes reminds me about Kes. During the latest seasons, she has developed from just a second computer technician to a skilled field agent. And mind you, she has a " babe competition" with the stunning characters Kensi and Eva. No talk about "no room" for anyone here.
We also have Tim McGee in NCIS who has developed from the series "whipping boy" and constant target of Tony's jokes to a top field agent. No problems with developing characters there.
There were some inications that Kes would become a more prominent character in episodes like "before And After" and "Scorpion #1" and there were more episodes where Kes played an important role in season 3 than there were for Kim and Neelix.
I don't think the writers had any problem with coming up with good Kes stories, they started to have problems when they were ordered to say that they couldn't come up with stories for the character. Otherwise it would be a total disgrace for those writers. If an amateur like me can come up with good Kes stories, then I expect even more from a staff of well-paid prfessional writers.
And of course could Kes and Seven have co-existed. I see no reason why they couldn't.