Walks around, pokes with a ten-foot pole, considers, and concludes that I shall carry on the grand old tradition of rambling as far from the program description as pleases me -- within the bound of the title, because I'm like that. I will, however, start with the first question and observe the answer is -- Say what? Many, many, many gods are less than compelling because they are flat and lacking in majesty. Others act like badly brought-up three-year-olds because the writer wanted to make the human characters superior to them, and apparently couldn't handle a bar that was any higher.
But on to creating them. . . .
Assuming you don't push your characters through apotheosis so they rival the gods, the way to keep the gods from overwhelming them is to make their appearances fugitive, heavily disguised, even ambiguous -- or, of course, non-existent.
Which will determine a great many other things about your gods. You are liable, of course, to hear all sorts of contradictory stories about gods who make appearances, but not the same sort as the gods who are off-stage at all times.
Which brings up the really important point: what are the gods doing in your story? They are, like everything else, plot devices to serve your main character's story. Most suggestions for developing your gods and your religions start with the wrong end; indeed, they usually start with the creation myth, which is not likely to affect your story, and which boxes in your world-building by assuming a creation myth -- not all societies have them, you know. To be sure, not all plot devices are created equal. The god appears and directs your main character to act as his champion is ham-handed and will either overwhelm the main character or appear thin and false. (Usually, in my experience, the latter.) Ambiguous signs and oracles are less heavy, and your character can have inner conflict as well, and be disbelieved by those about him, which creates more obstacles -- always handy for a plot, especially for suspense.
And among the other functions they can also provide is to give a moment of majesty and awe. Unfortunately, you need the rhetorical skills to pull that one off. Sometimes an attempt to make them impressive falls even flatter than a writer who just makes them silly -- though it can be much of a muchness between them.
Why are so many polytheistic? I suspect that writers, from various motives that we will not get into, want to avoid Christianity and so resort to Greek mythology or imitations thereof. It would work better if they did not so often derive their ideas from the books of Greek mythology they read as children. For one thing, this gives you the gods in thin, etiolated, homogenized form. For another, more serious, thing, this entirely omits the actual religion. On one hand, you get gods floating about with no real religious practices on part of their worshipers. On the other, you get Crystal Dragon Jesus where the gods do not resemble Christianity -- but the religious practices do. Especially those that would logically flow from theology, which is often non-existent in the religions. Which is not a bad thing, many religions have no theology, but they would not then have the practices of a theological religion. It's hard to tell which effect is worse. Reading primary source would help there, I suspect.
Part of bittercon