Gallium Nitride High Electron Mobility Transistors (GaN HEMTs) have rapidly emerged as a transformative technology, owing to the unique properties of the substrate material. They are poised to become a revolutionary advancement in RF amplifier applications, primarily due to their capability to operate at high frequencies and power levels with superior efficiency compared to conventional devices. Despite the rapid progressions, a noticeable gap persists in the literature regarding the relation-ship between mechanical stresses, defect generation, and their subsequent impact on the electrical characteristics of AlGaN/GaN HEMTs. Moreover, current dispersion effects, which are trapping induced reductions in output power, continues to remain a pressing issue. To address these limitations, this study first adopts a multifaceted approach and integrates mechanical simulations and Raman spectroscopy, in order to resolve fine details of stress distributions that a diffraction-limited Raman probe cannot resolve. This enables an extensive modeling of stresses in a typical HEMT structure and helps elucidate the underlying dynamics of defect generation, with the ultimate goal of informing and guiding the development of advanced fabrication techniques. In a second study, an ultrathin blanket dielectric deposition approach was devised to alleviate surface trapping, and consequently, mitigate current dispersion. The proposed streamlined fabrication process yielded a substantial improvement in device performance without compromising the transistor transfer characteristics.