Uh, Wallpaper Engine is essentially a software to display live wallpaper on your desktop. While Rainmeter is like 'widgets' that is running on your desktop.. Some wallpaper on WE can display system
stats, but not as robust as Rainmeter. But Rainmeter cannot change your wallpaper, iirc. It cannot make your videos playback as wallpaper for instance.

Personally it's not the case of which one is better

the visualizers in this and both rainmeter dont detect sound from my pc... does detect sound from microphone though

Is there a chance that you are using the latest version of Rainmeter together with Wallpaper Engine?

In my case the latest update of Rainmeter runs fine for some time until it suddenly starts laging
hard in a 2-3 second interval and this lag affects my whole system, windows, wallpapers even the mouse pointer freezes for a second. Could not find out what the cause is but restarting Rainmeter solves

Ah, sorry if I was unclear, no I'm not a rainmeter user, in fact usually with alternate UI's like stardock, rocketdock, black box, and the like, they have other inbuilt tools that function similar to
rainmeter but with better layering functionality that won't conflict, so you wouldn't need rainmeter.
So in *most* cases it wouldn't be a substantial loss.

Additionally if the function to render in the layer

But since WE allows the user to create a playlist of wallpapers, is it possible for Rainmeter to automatically change its skin/ layout according to the current wallpaper shown on WE? If that is
possible, is it then possible for Rainmeter to connect to WE and change the wallpaper on its own?

and rainmeter sometimes consumes a lot of resources, and I also think that something more could be improved in the wallpaper engine

overlay and fps sometimes but currently is disabled)
OBS (which isn't opened.)
Rainmeter? https://www.rainmeter.net/
ShareX

There's a few options out there: TaskbarX, TranslucentTB or Rainmeter skins.
TaskbarX is the one I also recommend.

if you want to add that, you need rainmeter app, wallpaper engine is well .. for the wallpaper. and cannot access that info

what are you saying ... rainmeter is the best there is.... i just love WE for the amount of content it has..... rainmeter is more optimized than we is right now and is technically superior on what it