I use org mode files for my issues and wiki-like features for my projects, and it works because my projects are very-small scaled. But having to commit issues and merge them can get boring very quickly. I haven't tried fossil, but if it has a nice quick UI for that, I might be interested.
WRT local push/pull, I don't have any problems with it in Mercurial (altho it's sth. I don't do often). What happens with git? WRT other problems, well, those are problems of all DVCSes and VCSes, so it's a bit too harsh to judge fossil by them, no?
Git command line is not inelegant, it's confusing, even at the basic level. An improvement on that is not only aesthetic. Magit is popular for a reason.