What are some features xterm has that I'm missing out by using gnome-terminal? Not doubting, just ignorant.

Off the top of my head, two features I don't think gnome-terminal can do:

sixels, this is a terminal graphics format. You could use them to have thumbnails in ls output, or view image attachments in mutt.

Tektronix mode, which is like a line-drawing mode - gnuplot supports it, so you can have really nice looking graphs and plots.

There are just little quality of life improvements, like being able to dump the screen in html format, preserving colors and attributes, or easy one-click access to the alternate screen buffer.

It's also easy to automate. You can use something like xtermcontrol to easily adjust anything from a script. Fonts, window size and position, etc. You can have custom key and mouse bindings too, and these are really powerful, but I'll concede the configuration format is arcane :-)

sixels does look really useful! Fortunately it looks like vte will have it available soon: https://gitlab.gnome.org/GNOME/vte/-/issues/253