price of the bond ETFs (like BND) would stay relatively constant (rising or falling temporarily depending on the interest rate changes), which is not the case.
Why do you say the changes would be temporary? If I hold a 5% bond and rates drop, the value of that bond increases and stays high until rates rise back again.
So yes, interest rates are the main factor for the value of bond ETFs, but they're not the only factor. The index tracks is a broad investment-grade index (not just government bonds), so changes in the credit risk of the bonds it owns can change the value as well.
That said, the value of the ETF has been relatively stable, fluctuating from a low of 77 in 2018 to a high of about 90 in mid-2020, somewhat settling at about 85 since then.
why are they a good investment, excluding the dividends (or is it just because of consistent stable dividends)?
Investors typically invest in investment-grade fixed income securities (including ETFs) for the income more than growth. So the dividend yield is more important for fixed-income ETFs than price growth. (price growth is "gravy" as they say)