I feel like Kragg is severely underpowered, and probably the worst character in the game. He is extremely laggy, is easily combo-able due to his weight, and can't pull off combos due to his moves' high knockback, but his moves do relatively little damage even though they have lots of startup lag. For instance, Kragg's side-strong, only somewhat less laggy than Bowser's Project M side-smash, does only ten damage, when it should do around 16 or 17. This makes it really hard for Kragg to rack up damage, in my opinion and experience. I know that Kragg is somewhat intended to be a ranged character, what with his neutral and down specials, but his normals need buffing in order for Kragg to become viable. Usually in games similar to RoA, characters similar to Kragg are powerhouses that make up for their poor combo game with devastatingly powerful attacks. Kragg has the poor combo game of the other characters similar to him, but not the power to make up for it. I think that Kragg's strong attacks being buffed would be important to making him a viable character. Granted, this is just my opinion, and I might not know as much about this game as other frequent posters here. I just would like to express my concerns with Kragg.
I agree with you that Kragg is probably the weakest in the game (I do want to mention though that he is sort of my main, and that may bias me, though I am not sure in what direction). Some matchups in particular are pretty bad. Wrastor combos kragg for days, and if orcane is being campy and you get separated from your rock it feels like you have literally no options. He also cobos kragg pretty hard. That being said I can still win those matchups with kragg. So they are doable.
I dont know that increased dmg is really needed, generally I dont start trying to land strongs until the enemy is high enough that it will come close to killing them. And another thing to note about this game thats different than smash is that with the inclusion of parries, getting a parry = a free strong attack. So giving ANY character, no matter how slow, a PM Bowser like f-smash would be too powerful in my opinion. I like that at low percents the optimal follow up for a parry isnt just a strong attack, but a combo starter. It adds diversity to the gameplay.
As for how to help Kragg be a little more even with others, I think giving his n-air more priority (so it trades less often) or disjoint might help some. Reducing the knockback or adding more hitstun on his b-air could probably help his combo game, It is already one of his better combo moves. The thing I really worry about with kragg is that as people get better at DI and parries he will have fewer combo options than the rest of the cast, and fewer options to get in. Baiting parries and punishing will probably be important.
One minor change I would like to see (though not really for balance, more for... me wanting it) would be if his up-tilt hit slightly in front of and behind him at the start (it is just behind now). It could be nice for shattering sitting rocks up and it hits better with how smash has taught me moves like that work (not that being different is a bad thing)
All this said I do want to mention that Kragg is a beast at edge guarding. between the rock, the rock spray, and strong offstage aerials this is where he really shines. Many matches against wrastors where I get comboed the entire match go to me because of a few low percent spikes or a few many-rock-long edgeguards.
TL:DR -- Kragg is a bit weak, but not unviable (for now). Minor tweaks could fix this, I dont think he needs any big, or even medium changes.
I like talking about this game... sorry for the long post.