Everything you said about "Mixtape" is pretty spot on. That was also the first Butch song I heard. I haven't listened to this full album in a while and I definitely will be revisiting it this afternoon. The emotion in each of these songs gets me each and every time.
For as much as I love this record I've never gotten too much in to his other stuff. I know a few Marvelous 3 songs and like them and I have I Liked You Better When You Had No Heart and really like a few songs but it hasn't hit me in the same way.
If Letters is your thing, the next one you may want to try is Sycamore Meadows. Your thought on I Liked It Better... seem to mirror those of a lot of the other commenters here. Good, but not as great as the rest of his stuff, so I wouldn't let that deter you too much