First up--its no secret that Marcia Lucas was, as Steven Spielberg put it, George's "secret weapon." The only Oscar the Lucases ever earned was the one that she won for editing Star Wars. Mark Hamill says "she was the warmth and heart of those films [the OT], someone he could bounce ideas off, who would tell him when he was wrong." IMO she is one of the unsung heroes of the American New Wave, editing American Graffiti, Taxi Driver, Star Wars and Alice Doesn't Live Here Anymore.
But what Gaffer Tape pointed out is absolutely valid--Lucas has always been stubborn and that was one of his greatest strengths. He was a genius who could see things that none of his contemporaries did, and when they told him was making a bomb he basically said "fuck it, what do you guys know," and he was right. His uncompromising vision is both the success of Star Wars and the failure of the PT.
But the truth is that its not one or the other--all of the above are true. Here's what I mean: Star Wars was designed to be a traditional drama, that is the audience is supposed to subjectively identify and become emotionally involved with the characters and the story, and thus be moved, be thrilled, be entertained. Unlike THX 1138--that was a film that is very much like 2001, you're not supposed to identify with characters or become engaged in a dramatic plot, the film exists for its form and its intellectualism.
But, the problem was that people didn't get the very concept of Star Wars--they didn't understand robots and spaceships and how you could make this be serious and emotional they way a normal drama is, the way, say, American Graffiti was, with humor, thrills, and identified characterisation. Everyone thought of "space opera"--the whole Flash Gordon/serial style that Lucas advertised it as--as being silly, unrealistic, with cardboard characters, convoluted plotting and implausibility. And if you read the first drafts that Lucas wrote thats what they are like--the characters are thin, and for people that couldn't see it the way Lucas pictured it in his head it must have easily seemed silly. Spielberg grew up on the same sci-fantasy diet that Lucas did and could see how you could take the vernacular of the old adventure films and update them with realistic characters and effects--and thats the sole reason why Lucas "got" Star Wars and supported it; and so did Alan Ladd Jr.--his father was the producer of The Sea Hawk and all the films Lucas said it would recall, which is why he also "got" Star Wars.
But Lucas wasn't good at writing, and thats why the film succeeded only through the input of others. I know the film says "Written by George Lucas" but its decieving because the film was co-written in a sense by a half dozen other people. Lucas wanted the film to have realistic characters that people could identify with, that would be interesting and funny and seem like real people, and so over the course of four drafts he listened to input from Hal Barwood, Gloria and Willard Huyck, Francis Coppola, Walter Murch, Matthew Robbins, Steven Spielberg, Michael Ritchie, and more, plus his wife Marcia--whom specialised in down-too-earth, realistic character-driven pieces--was there to point out "this is dumb" and "I don't get this". Then to top it off the Huyck's wrote a polish of the final draft to change the dialog to make it more realistic, and with the spot-on casting the actors brought it to life and made it their own.
Lucas said in 1973 he "gave up" on hiring writers because the results never satisfied him--he shelved entire drafts of THX, Graffiti, and yes, Star Wars II, because the writers didn't get what he was going for, both because his vision was so particular and because he's a bad communicator. But he didn't really give up at all. Instead of having someone literally write it for him, he would be the one to put down the words on paper in a manner that suited his tastes, but the script would be shaped, edited and influenced by a whole circle of friends whom all were successful writers themselves. They pointed out what worked, what didn't, what should be kept and added and where to improve, and even in some cases did actual writing themselves. The writing was totally a group effort. And then the edit had a team of people, including Marcia, who got rid of all the crap--Deleted Magic has the film edited as it is in the script and its very weak, but the changes they made brought it to a whole new emotional level. There's a reason it won the editing Oscar.
And thats how Star Wars ended up as a film that was uniquely George Lucas, that had all of his vision and defied those who said he was wrong, yet simultaneously was emotionally engaging by being the product of letting others shape and influence the work to make up for his shortcomings.
Why did the prequels suck? Because he abandoned this formula--the same forumula he basically used in American Graffiti, Empire Strikes Back, Raiders of the Lost Ark and Return of the Jedi. At the time of Graffiti and Star Wars he would confess he was "a terrible writer", he had little confidence in himself and could face the facts that he was bad at writing characters, dialog and plot, as he admitted at that time. But when he got nominated--twice--for a "best screenplay" Oscar, had four of the highest grossing films of all time under his 5-film resume and was the most successful filmmaker whom ever lived: I think he began to think "maybe I'm a good writer after all." So when it came time to write the prequels--he just did it all himself. He didn't have a wife anymore, didn't collaborate with his friends anymore or even show them the script, and because he was treated as if a deity no one dared say anything. So thats why we ended up with Episode I, a film which shows how an unchequed Lucas goes off the deep end, getting obsessed with aliens and special effects and kooky weirdness and totally forgetting about characters and completely ignorant to constructing drama or a finely crafted plot.
So to sum up: yes, he was writing for Marcia and his friends. The reason he made Graffiti was because his wife and friends said he could never do a realistic and funny character piece and so he said "I'll show you I can"--and Star Wars was an extension of this. So he was writing for them from the perspective of characters and emotion--and in fact they themselves were the ones writing it in some sense--but at the same time the concept of the film, of spaceships and sword duels and such, was a uniquely George Lucas thing that was his uncompromising vision, and its the fusion of these two elements that created such a rich, imaginative, unqiue, but also warm and recognizeably human, film.