That Kate wasn't a love interest is a good thing, because it was much more interesting that way. It would have been too typical - stereotypical even - to go down that very predictable road.
Kate also helped to establish that "ANGEL" was a very different series than "Buffy", given that she was a big-city cop unaccustomed to these disturbing supernatural elements. One of my favorite moments with her was near the end of "Sanctuary" where she arrested Angel and basically announced to everyone near that he was a vampire by threatening to throw him into a sunny jail cell, which took Buffy by surprise. Kate was more real-world, in that sense. You just wouldn't see that sort of thing on "Buffy" aside from Buffy and faith being pursued by police. Arresting a vampire just sounds ridiculous and that's what made it so interesting and made Angel's series so different. Small, fictional town where supernatural things are commonplace and the line that divided good and evil was easy to see. Real city of Los Angeles, a heightened version of it but still the real city, where people and demons co-exist but only a chosen few are aware of it...that really gave the shows a different feel and atmosphere and Kate was a big part of establishing that, as was Charles Gunn.
Love "The Shroud of Rahmon" - the episode where Angel bites her. Great fun, that one. 🙂