I can understand the rationale behind the character designs truth be told: G1 designs were blocky and wouldn't translate to screen. The look was alien first, Earth based second.

Taken from Wiki:

The filmmakers created the size of each robot with the size of their vehicle mode in mind, supporting the Transformer's rationale for their choice of disguise on Earth. The concept of traveling protoforms was developed by Roberto Orci when he wondered why "aliens who moonlight as vehicles need other vehicles to travel". This reflected a desire to move to a more alien look, away from the "blocky" Generation 1 Transformers. Another major influence in the designs was samurai armor, returning full-circle to the Japanese origins of the toy line. The robots also had to look alien, or else they would have resembled other cinematic robots made in the image of man.

Also the whole "whatdafuq-is-happening-on-screen" problem was partly due to Bay's, imo, first-go at directing giant robots on screen. In Transformers 1, much of the action was filmed quite close, almost from the POV of the humans, which resulted in the bots filling up most of the screen and making things hard to work out. In subsequent movies, Bay utilizes a lot more wider frames to allow for full-body shots of the bots.