Outside of just the reasons stated above, the Spirit Bomb saving the day was one of my favourite aspects of the arc, and I'm not huge on fusions as a concept, so I'm glad Toriyama wrote it this way. The Buu arc is essentially about the influence of people, the necessity of having those in our lives who we love and care for. It's why Kid Buu was stated to be evil incarnate, specifically because he lacks the influence of those absorbed (, and the Spirit Bomb was just a better way to communicate that than Fusion. Partially because there's layers to it, first we see those who Vegeta influenced positively (basically just the main cast), then Goku (which brings back some nice cameos like Upa to help give a sense of finality to the series), and finally Hercules, as it was ultimately the world's affection for it. Note that Fat Buu also changed to good thanks to Hercules and Vegeta's entire character arc is about how he's changed thanks to Kakarot and his family. The fusion dance would kinda work with the main theme, but nowhere to the extent the Spirit Bomb does. It'd also just feel a bit redundant.
