MS4 here. I don't think the letter grading system is a negative. As the other med student put it, it doesn't affect competitiveness. It's not like the Top xx% of students make A's, the next xx% make B's, etc. The only person you compete with is yourself. I think having the letter grades helps you figure out where you stand in terms of how much you understand/need to learn. The reason I came to UTHSCSA (or I guess we're trying to change to UTSOMSA now-- just a heads up guys, it's never UTSA) was because of the culture here. Everyone helps each other, shares study resources, celebrates together; it's really a friendly atmosphere. You and your classmates are going through this difficult journey together, so there's no reason to cut someone down to get ahead. There may be a few gunners in each class, but they aren't popular, it's obvious (to students and attendings), and they are definitely the minority.
Re:research, /u/Tipsy McStagger answered it exactly how I would. There's lots of opportunities to do research if you want. I have friends who have published as second authors; I'm sure there are people in my class who have published as first. Plenty of them have presented posters. I personally didn't do research, but if you ask and look for it, the opportunity is there.