Merge requests should be rather small to make it easier to review.

With this I wholeheartedly agree

if your work warrants multiple commits, then it probably also warrants multiple merge requests.

With this not so much, but if you keep your merge requests so small, squashing them is no big deal, that's a good counterexample for my previous point.

another good thing is that when we decide to release, we can easily look through the commit history for a change log. No more sifting through minor fixes commits.

That still requires you to write meaningful messages, just a bit rarer. We do have trouble with change logs, but we had exact same problems when people squashed left and right. Maybe squashing helps self-discipline, though, I haven't thought about it that way