Hello -- your question is one that will rarely be answer the same way twice, but for me REWRITING is where I make so many "aha" discoveries that really and finally improve and characterize the book to make it as unique as it can be. I worked briefly with your agen Xavier Holecraft (not her real name), so I know how frustrating it can get; I pulled out when after a year or so she was unable to place anything I sent her, and yeah, she wanted a lot of rewrites. I don't hesitate to rewrite but after so many hurdles one gets well...frustrated.
I finally got those Ransom books sold after they were turned down by EVERY publisher known to another agent who represented them. We'll call him Calvin Jeans, a fellow I fired TWICE. Agents frustrate me as much as do publishers. If working with a traditional publisher, I prefer doing a partnership/rewrite with an actual EDITOR in house. If I am workking with a publisher.
I say if because for my last book done with a publisher we'll call Zenith Press (made up name) while they were happy with the sales and pocketed what they considered enough to make them happy, I earned very little, a pittance. After that, I took the same book and priced it at 2.99 as an ebook and have made some serious money, thank you! This after getting all my out of prints "in print" as ebooks. Some forty titles that I feel publishers looked on as midlist and with no or little enthusiasm. The Ransom titles are as good as I get, and yet they did not earn out; I say it is due to the piss poor way they were handled and given short shrift by the publisher as my editor was gung-ho over them while the pblisihing house simply did not know what they had in hand. (Your letter was prompted by your reading of these books and how you loved them.)
My last six or so titles have been Original to Kindle ONLY titles. I have extended 'dead' series as a result, placed Ransom on board Titanic 2012 - Curse of RMS Titanic, did my Bismarck 2013 - Hitler's Curse without anyone telling me no one would want to read an alternate history of the greatest battleship in history. I also publsihed what amounts to my life's work, a novel turned down by EVERY publisher and agent, inlcuding Chan and Calvin -- Children of Salem.
My first agent, who has since passed away, said of my Salem Witchcraft title 30 years ago, "I love it, Rob. There are scenes I cannot get out of my mind, but in this market, I can't sell it." I got the same sort of response from every place I sent it--and it went everywhere. As an ebook, it is doing very well and has found an audience.
So....as far as rewrites, imagine how many times I had to rewrite Children of Salem -- off and on between doing 8 series characters over 30 years! So I may not be the best person to ask regarding "Are rewrites necessary" as in my 'book' they are absolutely necessary, and so far as I am concerened, editors are a fantastic help (not so sure the 'editing agent' is anywhere near as helpful--least not in my experience).
Man....so in the end, yes, REWRITNG is WRITING so far as I know. Frustrations abound in dealing with agents, editors, and publishers but the real hurdle to a reader's GETTING you, following you, understanding you is YOU. Don't get in the way of a good edit. Once you get editorial corrections take them like ducks in a shooting gallery and deal with each in turn. Some will be minor, grammatical, logic issues, while others may require a rethink of format, plot, characterization. Take them each in stride and realize the best for the book is not always one's own myopic view.
Good luck and happy REWRITING.