Initially I think the F-16s were tactically considered more expendible even to the point of taking on the role of bait and decoys. They weren't considered as first class air dominance fighters. You can probably speak better for the Navy about the F/A-18 but I suspect that a similar mindset prevailed.
Obviously each proved superb for all the roles assigned and many not considered when designed. The Growler configuration comes to mind.
Frankly the F-16 can hold its own against 5th generation planes in terms of handling qualities. It only comes up short when the aerial battlefield suits the design philosophy of 5th generation fighters..
Agreed. Not that the two were called competing against each other, but imagine if the F-20 had been picked instead of the F-16. There is no way the smaller F-20 would be able to carry all the stuff the F-16 has.