\I'm just trying to find some middle ground with Slowpokeking whose been arguing with me over loot drops for days now.
If the existing cosmetic benefits aren't enough, I doubt adding more will do any good unless you make them so common that they're no longer special, at which point they lose the advantage of being special.
As to dropping better loot, remember that there isn't a non-set tier equivalent to Rakata so Hm LI can't follow suit to the loot paradigm of the T1 Hm FPs (exotech gear from bosses and a columi token from the last boss). The paradigm is follows is still an upgrade over the previous tier (columi tokens from bosses and a Rakata token plus an extra Columi token, both for slots that only drop from final bosses of Ops, from the last boss).
Regardless, most of that loot became redundant as soon as the developers provided BH comms from the GF daily. The only loot that *actually* matters is stuff better than BH gear because you can get all the BH gear you need running HM FPs through the groupfinder.
The only Rakata tier gear compromise that I would be willing to make would be to have each boss drop a random grade mod, enhancement, or armoring (though not necessarily the armoring since that is tied to the specific rating of a piece of gear and might be a bit excessive). It's not a full piece of gear, but it's definitely going to be an upgrade for Columi (assuming that they're not using the wrong mod/enhancement) and, depending on the specific enhancement gained, could be an upgrade over an existing mod or enhancement for some ill-itemized Rakata or BH gear they've already got.
A mod or enhancement would provide a discrete and tangible gearing improvement and making it Rakata gear would make it provide the desired improvement in loot tables. The cosmetic rewards are already there for the people that want them. The only improvement in the loot table needed is providing a tangible gearing improvement without making it too strong. Adding random mods/enhancements as drops could do that pretty well.