I'm wondering how much of this "action versus character development" kerfuffle is just a terminology problem. Some people talk about how it doesn't have character development but does have character "conflicts," others have referred to "relationships" instead of character. Someone else mentioned that there seems to be character development for the heroes that don't currently have their own movie series - first and foremost Black Widow; also Bruce Banner.
One thing I want to leave aside is the idea that "action" and "character development" are necessarily distinct - I think that's only true in
bad movies. And this movie is very, very good. But since one of the reasons it's so good is that the action is extremely well-staged, the action scenes are all genuine pleasures in themselves, so I'll just note that and move on.
One of my biases as a journeyman improviser is that so-called character
just is relationships. That's something of a simplification, but it's a simplification that will take you pretty far when you have to make stories in theatrical media. From that perspective - mine

- if there are relationships and those relationships change, there's "character development." (And if there are relationships and they
don't change, there's boredom!)
As for classic character "arcs" as such, on one level, "non-solo" characters having the arcs is a classic of the team-book genre itself, right? Captain America and Thor
hang around the Avengers. Vision and Scarlet Witch fall in love. So Banner, over the course of the movie, dips his toe into the notion that maybe, just maybe, there are circumstances where becoming the Hulk isn't the worst thing. And Black Widow tries to put her very dirty past to use cleaning up the present, and discovers the joys and the limits of that. (Remember, it's pure luck that she doesn't, in the name of the mission, trap Tony Stark on the wrong side of the barrier forever.)
But as for classic character arcs, Tony Stark has a huge one! He goes from Kirk to Spock over the course of the movie, from the guy who doesn't believe in the
existence of "the sacrifice play" to the guy who's willing to make it.
Finally, I want to call your attention to the coolest bit of the script I've noticed so far, in two viewings. Natasha is interrogating Loki (though Loki doesn't realize this), and pressed on how she feels about Hawkeye responds, as you know:
"Love is for children."
A classic tough-broad response! Except not. She means it to sound that way. But it's a callback to her very first exchange with Banner in the house at the edge of Calcutta to which she's paid a little girl to lead him. They start that young, spies? Banner asks. And Natasha says:
"I did."
So, wow. Loki's not the only one revealing more about himself than he intends in that scene.
Jim