Michael's a guy who probably, while being vastly intelligent, has little to no street smarts. He's not a guy who came up on the streets and hustled and racketeered his way to the top; He's a college guy who I don't think would understand the world of a Willi Cicci or a Rocco.
Vito hadn't been on the streets for decades. So people like Cicci or Rocco may have never seen him. As you point out correctly, Michael was intelligent. And he was socially intelligent - he knew how people think. That's all he needed for the job.
In terms of respect, I think the ordinary soldier was satisfied and loyal as long as money came in for him.
