Peter Jackson did about as good of a job as probably anyone else could have done. The LoTR series was long considered “unfilmable”.
I have yet to see a decent Lovecraft adaptation - another author considered “unfilmable” as well. Guillermo del Toro has a project stuck in development hell: “At The Mountains Of Madness” and according to him, his screenplay is quite faithful to Lovecraft’s titular novella. If there’s anyone who could pull off Lovecraft, it’s del Toro; he cites Lovecraft as one of his biggest inspirations, so I have little doubt he’d take great care to film it right.
Why is it in development hell? According to him, the studio honchos aren’t too thrilled because there’s no love story and no happy ending. Which is pretty typical for Lovecraft, but that makes the studios nervous, and thus far, del Toro is refusing to compromise his - and Lovecraft’s - bleak vision.
Give Hollywood a chance. They'll work out a touching human-shoggoth relationship and turn it into a parable of transgressive love.
It’s not in development hell it’s cancelled. For now anyway. The studio would not finance a film of that length, subject matter and cost unless it was rated PG-13 at max (and not cut off the primary audience for films like this) and somewhat happily resolved as you stated. That’s not possible with a faithful adaptation.