I’ve used it with a lot of success at my current and previous companies. To address a few of your cons:
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Engineers are quickly comfortable with the tooling and VS Code plugins give you quick feedback. You can also point the plug in at a hosted instance to avoid running a local instance in Docker
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Separation of different types of diagram is often a bonus—too often have I seen architects try to cover too many concepts in a single diagram—instead a Context diagram should define your system and its neighbours, a Container diagram the major pieces of your system, a Component diagram verges on design and is a good place for engineers and architects to converse. If a container or component has a particularly complex workflow, then a supplementary flow diagram helps. If it uses an extraordinary pattern, then a class diagram might help, and so on.
I find keeping C4 diagrams in wikis often leads to them falling out of sync with the codebase. Ideally you’d keep the markup for the diagram in the relevant component repo and have a CI/CD process that keeps your diagrams up to date. I wrote a PlantUML Docker image for exactly that: https://github.com/robbell/plantuml-docker
Alternatively, Mermaid support is becoming more common—available in GitHub and Backstage TechDocs, and that allows you to embed diagrams in Markdown. Both PlantUML and Mermaid have support for linking to other diagrams I believe, and you could put your API definitions in your owning repos too using OpenAPI to keep everything together and in sync.