What stops anyone from making new GUIs, maybe even a new framework for doing that, optimised for touchscreens rather than keyboard and mouse?

Maybe I’m just unknowledgeable, but to me that idea doesn’t sound very far-fetched.

Who wants to run scaled down desktop apps on their phone

I believe the UI of most apps could be made to work well with phone display sizes and resolutions.

and who wants a terminal on a phone either?

Well, I do! It’s great when you want to connect, do or automate something there isn’t an app for. For now I sometimes run Termux on Android. Among smartphone users in general I’m probably an edge case, but among Linux users, I must say, using a terminal on the phone doesn’t seem that crazy to me.

So far I’m satisfied with our GL.INET Flint 2 (GL-MT6000). The price is within your range, and you can buy it directly from the manufacturer. It comes with OpenWRT and they’ve made it pretty easy to e.g. run your own wireguard VPN and AdGuard Home (like PiHole) for all your connected devices. The coverage is decent, and upgrading gave me WiFi in the second bathroom where the old router (10+ years old) could never reach. According to their own specs it has Wi-Fi speeds of 1148Mbps (2.4GHz) and 4804Mbps (5GHz), though I haven’t made my own measurings to verify those, and VPN speeds are lower at 190Mbps wired for OpenVPN and 900Mbps wired for Wireguard. At least this router has been very stable for the half year we’ve had it, and I haven’t experienced any bottlenecks from our modest usage.