This series of novels is very compelling. I must say I was very captivated by how the plot works. It's very confusing if you don't know anything about it though; I recommend watching the anime first before trying to decipher the light novel.
Plot: Not too many loopholes. If you're a fan of the "What's Going to Happen Next" genre then I suggest you read this. The cliffhangers, although leaving you unsatisfied, will feed your desire to read about the next.
Art: Hah, the art totally rocks. The cover and front flaps basically sums the story up. The in-book art are black-and-white manga-like drawings that are high
quality, but I can't argue with that. I'd rather have a novel with a few pics than none at all.
Character Development: This is where you get to know the story better. I think I'll start with Kyon.
Kyon: Your average bored high school student. Although he sounds very bored at first, as the story goes on he has matured into what we all know as the SOS's conscience. I am very compelled to give out spoilers here; but for the sake of those who haven't read I won't. All I can say is that he is the impromptu leader of the group, and the unofficial savior of the world. You'll get to know why.
Haruhi: Ah. Here's the happy-go-lucky leader of the SOS Dan. As we all know, she formed the group just by dragging everyone in. But as time goes by, the Sealed Realities decrease one by one, and she begins to feel that everyone is a friend, even Mikuru. Little by little she realizes her love for Kyon, as too many hints are dropped here and there.
Yuki: This silent humanoid interface alien is slowly begging to be human. I won't say anything further, but she is the character who (in my opinion) is the one who developed the most. She is beginning to realize the word "Friend", and for those of you who want to know more about her, listen to her character song, "Yuki, Muon, Madobe Nite". That'll explain a lot.
Itsuki: He hasn't changed much really, maybe just the fact that he is beginning to work side by side with the other groups covering Haruhi. Though he always talks a lot, he now has sense in him, and doesn't do much bootlicking either (maybe that's the reason why Kyon doesn't blame him often nowadays).
Mikuru: Aside from the physical features we all know too much about, she also changes in the emotional department. She is braver now; she is now willing to take risks even though she doesn't know the consequences (pretty ironic for a time traveler). At first she was an outsider compared to Koizumi and Nagato, but because of her changes she is now willing to work with them (even though at first she refuses to work with Yuki).
All in all, very nice novel series. I suggest recommending it to your friends as well.