Couple things I have noticed with Hangouts and MMS issues
1.I noticed on my PC I can add a video of any length to a hangout and it will upload it. It downgrades the quality a bit depending on the size of the video but it works. Now on my Nexus 5 you don't have this option, you can record a 20 second video before hand and then upload it but thats lame. I hope they do the same on the phone version like they do on the desktop in a future update.
2. If all else fails and you simply don't like Hangouts for your sms/mms I will suggest you try Textra. This sms/mms replacement app is the best I have seen on Android(and I have tried all of them). It has a very simplistic interface without all the extra bloat of others (Im talking to you GOsms!)with emoji/group messaging and even a fantastic gif upload feature that has 1000's of gif's to choose from.
Im really wanting to just use Hangouts as my all in one messaging/sms app and its almost there, almost.