There's something to be said about simple stereo mic'ing and recording.
I like it, and I've done a fair amount of it, but I think you'd have a higher potential in production value with something like the Tascam 246, with it's 6-inputs to 4-track capability, EQ, mixer functions, and high speed tracks. The 246 is one of my favorite machines, and it's an excellent 4-tracker.
Y'know what, I'm game for however much production value you're into. If you want to bring on the reel & small mixer systems, then bring them on! I certainly have no problem with that, and a r/r tape would yield even higher fidelity than any cassette based system. However, for the all-in-oner's and Portastudio class of recorders, you can hardly go wrong with the 246. It has great features and makes excellent recordings.
I think of the pro cassette Walkman Recorder as something for field recording, pocket/scratchpad recording, or for making bootlegs. Minidisc has the Pro Walkman beaten nowadays for bootlegging, anyway, but that's another post! On the other hand, something along the lines of the 246 is a total production machine.
Reel/mixer systems are also fine in my book. Something along the lines of a 22-4 and an M30 would be cooltime. I mean, you implied compact, right? For compactness you have to stick with the Portastudio, but if you want the big guns, maybe get a 34, 34B or 38. I recommend Fostex secondarily, & they had several compact reel/reel 2, 4 & 8-tracks.
None of these analog recorders or mixers are prohibitively expensive these days. The trick is to get the nicest machine at the lowest price, and get it delivered successfully in one piece.
For however much money you want to spend, the equipment's there for you.
You led off asking about a Walkman Recorder in comparison to the 246. You want flexibility, convenience & portability and a quality recording for your sessions. The 246 is in a whole other league of recorders than the Pro Walkman. I'd bet money that in capable hands the 246 would produce a noticeably better recording, overall, than the Pro Walkman. Not that the Pro Walkman isn't a nice recorder, but the 246 is better. You know I'd say that, anyway, it seems like the obvious answer.
With multiple tracks, (4), it's not always about overdubbing. Sometimes it is, like with strictly solo work, but other times it's a matter of how many tracks can you record simultaneously in a live room that factors into your resulting sound quality.
Reels & mixers are surely nice, but you kinda emphasized portability and convenience, so I'd have to say start with a nice Portastudio, 246 or other.
One last thing, but you asked about sound quality, and the first thing I responded to was features. I happen to think that the more complex, quality or sophisticated the features of a recorder would in general lend itself to being able to produce better recordings, and having a higher feature set would hopefully actively translate into getting a better sound onto tape.
Gosh, I'm sorry if I repeat myself.
Anyway, best of luck!