The best arc in the entirety of the Naruto franchise is the next arc in Shippuden, so there. Then after that it's consistently good to great for a while (minus the fillers in between).
Despite having some of the usual Naruto trappings, totally agree.
Definitely one of the best and one of the few good things to come out of Shippuden.
Do the production values improve? To me, the show's plot isn't as much the problem as is the bad dialog, lame shot composition, terrible pacing and sometimes laughable animation.