You don't cast an actress of Dame Judi Dench's calibre, profile and skill and just use her on one scene.
She was one of the world's best actors in 1995. She just wasn't that well known to the wider cinema audiences.
No argument that she was one of the world's best actresses; she was Dame Judi before Bond. I don't however think it was a coincidence that in every 007 film since winning the Oscar she has been featured more and more. I think on TND and GE she was still being used like Lee/Brown, appearing briefly in bookend exposition scenes as more or less a cameo. TWINE and afterwards she felt more integral to the plot, in my opinion.
In the UK, the reaction amongst the critics and others when she was cast was a mix of "what an inspired move" and "why is she lowering her standards by appearing in Bond?". To some over here, it was almost as if she had signed to do a season in pantomime in the provinces after a season doing Shakespeare at The Globe, yet it was an inspired career move.
I find the apparent hostility towards M doing more than giving Bond his orders and sending him on his way a bit puzzling. True, as I've mentioned above, having M on hand to explain things helps from time to time in between the "crash, bang ,wallop" stuff, but that is a fault of the scripts rather than a ploy to expand M's role. But it isn't as if M was a mere cameo character in the Bond books. In some of them - Moonraker, for example - he appears in several chapters.