Would "Sgt. Pepper's" be a better album if.....

and the Mona Lisa would look so much better if she were sporting Ray-Bans. 

I don't listen to much psychedelic music anymore but I think there are some great examples of psychedelic songs that still sound good today.  It's probably true that the lesser examples of the genre are more embarrassing than those of some other styles, but every category of music has its hits and misses.  Personally, I think rock peaked some years later, around 1973.  While it still survives and produces some worthy recordings there hasn't been much in the way of revolutionary sounds since then.  There are a lot of nice re-treads and mish-mashes.

Different Agoners would keep or cut different tunes.  There's no absolute answer, no consensus, on this.  If you put SFF and PL on this LP then what happens to the Magical Mystery Tour LP (without those two very strong tracks)? 
When I'm 64 is a fairly lightweight song (he wrote it when he was 16) but IMO they managed to make a good track of it.  And it is very popular.

saintintn, I think MMT is far stronger than Beatles For Sale, which is such a disappointment coming after the very strong A Hard Day's Night album.  I do agree with George Martin that "the White Album" should have been a single disc and not two.  That's the one (of the later ones) with a lot of filler.

And, the OP begs the question:  Would Revolver be a better album with Rain and Paperback Writer instead of I Want to Tell You, Dr. Robert or Love You To?
These guys knew what they were doing.  They dropped songs or re-did them from scratch when they felt the quality was not there.  I trust their judgment.  SPLHCB is just fine as is.