Yes!! Book 3 is definitely where it makes the jump from "fun, magical children's series" to "deep, brilliant fantasy epic." Or starts to, at least... there's so many more layers even beyond that, it's amazing.
And so true about the characters. I can honestly say I pretty much love every one of them, even the villains, even the annoying ones, because they are all so quirky and interesting, there's something to love about every one, even the ones you love to hate. I've never been able to pick a favorite character; it's just too hard!