The Halyard needs to go down the front of the mast for optimum tuning. The battens getting caught is and always has been, the nature of the beast, as the H16 has a fully batten jib, so the roach is very large.
In reading through a lot of posts and articles on the H16 you will find that Jib Halyard tension is probably the most important tuning aspect of the H16, so much so, that Hobie introduced the Aussie Halyard and the ability to adjust it on the water years ago.
I myself had the same issues as you when i started out, so I cut my battens as short as i could, and I did install the Halyard clip on the side of my mast and ran the halyard down the side as I had an older boat with the block on the side, and not in front. However, as I got better a tuning, and putting more pressure on the halyard, i was pre-bending and pre-loading the mast to the port side, which was not good balance, and affected the mast rotation.
It worked great for fun easy going sailing, but for racing, it was not good.
The reality in fact was that I needed to hone my tacking skills more. Good Hobie Sailors never have this issue as they have nailed down the tack. The trick is when you tack, leave the Jib cleated on the new windward side only until the very point it backwinds, at that instant let out the jib sheet about 6-12 inches and let the jib fill up with air. This is what sailors refer to as powering up the jib and sailing the jib through the tack. At this instant, now let out more jib sheet, and bringing in the sheet on the new leeward side at the same time, and keep that "full" shape of the jib through the tack to the other side.
What is key is that you are now PULLING a fully bent, powered up jib, to the other side as the wind pushes on it at the same time. Two things happen here, with a bent Jib, the distance from the luff to the mast is now shorter as the jib is bent, and two the battens are now not perpendicular to the mast, there are actually bent way from it as it goes by, and they don't get hung up. This does work in light winds too, just takes more practice.
I believe the Hobie is set up by the factory more for race tuning, and sometimes you need to change things to make it easier to sail for those who are not into racing. So, moving the halyard to the side is doable, you'll just need a block on the bottom port side to do it.