Re acting strengths comparison, I can't judge. I've never seen ES in anything else, and I'd only seen PSM in Nancy Drew, before Dynasty. I haven't watched either soap show in a long time, and I'd have to watch PSM and ES back-to-back to know. I believe their personalities did impact their portrayal of Fallon. ....ES's portrayal of Fallon in DS9 is markedly different from her portrayal of Fallon between DS6-7 (brief guest appearances) and DS8 (full-time). Her earlier Dynasty Fallon was similar to her TC Fallon, but a contrast to PSM's Fallon. In DS9 she was sounding, looking & behaving a little more like PSM's Fallon.
I believe that DS9 E.P David Paulsen had found humour in a line from TC, in a scene between Jason and Miles, and brought it to life in another world with a twist. Jason had said to Miles words to the effect: "My God, what do you want to see happen here? Jeff go away and Fallon turned back into Randall?" In DS9, it was Miles who was absent from the scene, and ES was a lot more like PSM. I see many happenings on DS9 lifted from TC and given a twist.
I've also not had anyone who's watched The Colbys back me up when I've said the series existed on a different timeline than Dynasty, with different natured characters, family history and stories which appear shared with Dynasty but in reality contain crucial differences. Part of the problem is people don't take in the details, especially in the parts of TC that bore them. They tune out or skip them.
The collective consensus seems to be that the producers, writers were not doing their jobs, did not care about continuity. To me, they were writing to differentiate, not dovetail their stories. I actually wish viewers would not watch TC alongside Dynasty S6-7.
Hence why, when Dynasty had the opportunity to add the TC characters to its Colby saga, it chose not to have Jason explain to Jeff that (the late) Cecil had lied to Jeff about J being the last of the Colbys for whatever the reason, say a family feud. Instead, Dynasty rewrote its Colby saga so that Cecil and Jeff both had known they had living kin in LAand Jeff had last visited them 11 years ago. Watch TC closely, pay attention to how characters think, business story details, when/where things happen, etc and you might see where the differences lie with Dynasty.
I consider TC to be a standalone series. Certainly David Paulsen was not the developer of this series. Essentially, The Reunion undid his Colby rewrite, and more.