I have been doing experiments off and on when I get time and I have a guess about why it’s settling in plateaus. Below is from a simple one, I set the domain to show only the wire frame in the viewport.
The fluid above has 100 resolution. If you look closely you can see the horizontal lines parallel to each other in the fluid. The fluid is built in these horizontal layers of fixed distance from each other, and triangles connect them.
Once I saw that I thought there’s probably no escaping the problem, so I tried a work around that works reasonably well. This first one has 200 resolution and has a similar problem as in my original post. You can see that the fluid is floating above the object and kind of pinches off at the edges.
This one below is at the same resolution, but I duplicated the obstacle, scaled it down slightly so it sits within the original, and removed the fluid obstacle settings from the original. In other words, the obstacle is not what you see, but a slightly smaller copy of the object that is hidden by the larger one.
You can see that the fluid appears to be hugging the object a lot better (in fact the fluid intersects the object). But it’s actually floating on top of the mini-obstacle underneath. As for reducing the line effect, lower resolution appears to be better, because the higher resolution tests I did seem to be really trying to make the lines more defined instead of getting rid of them.
I find it hard to believe this is normal for fluids and that there is no way to control this. But on the other hand most of the videos I’ve seen are of a fluid in a cup or other container, not rolling off the top of a smoothly curved object.
Anyway, thanks for the helpful comments. If someone finds a better solution please post it here.