Despite the fact that the play is called Othello, a truly valid argument could be made that the central character of the show is actually Iago. While it is true that the entirety of the play details Othello’s torturous and tragic downfall, every scheme and maneuver to that contributes to it is executed by Iago. It should also be noted that he has more lines throughout the play than Othello does. Despite his various schemes, lies, and poisonous interactions with other characters, the most interesting aspect of Iago’s character is his extended use of soliloquies. While it is known to the audience that Iago is a repulsive and sinister character, Shakespeare somehow manages to convey Iago as multifaceted. We are usually disgusted by his actions, and especially his words, yet we are made to almost feel occasionally sympathetic towards his motivations. For example, in Act II, Scene I, Iago states,
That Cassio loves her, I do well believe ’t.
That she loves him, ’tis apt and of great credit.
The Moor, howbeit that I endure him not,
Is of a constant, loving, noble nature,
And I dare think he’ll prove to Desdemona
A most dear husband. Now, I do love her too,
Not out of absolute lust—though peradventure
I stand accountant for as great a sin—
But partly led to diet my revenge,
For that I do suspect the lusty Moor
Hath leaped into my seat. The thought whereof
Doth, like a poisonous mineral, gnaw my inwards,
And nothing can or shall content my soul
Till I am evened with him, wife for wife.
Or, failing so, yet that I put the Moor
At least into a jealousy so strong
That judgment cannot cure. Which thing to do,
If this poor trash of Venice, whom I trace
For his quick hunting, stand the putting on,
I’ll have our Michael Cassio on the hip,
Abuse him to the Moor in the right garb
(For I fear Cassio with my night-cape too)
Make the Moor thank me, love me, and reward me
For making him egregiously an ass
And practicing upon his peace and quiet
Even to madness. ‘Tis here, but yet confused.
Knavery’s plain face is never seen till used.
This speech is very polarizing because in most instances a soliloquy is meant to convey a message, meaning, or motivation to the audience that we were not fully aware of before. However, we as an audience are left wondering if we ourselves can truly believe what he is saying to us. He states that he too loves Desdemona, despite the fact that he has given no previous indication of this. However, he also states that this is not purely out of lust, and that he uses it to further motivate his revenge, since he believes that Othello has slept with his wife Emilia. This is strange, as no evidence whatsoever has been given to validate this declaration. It is entirely possible that Iago is simply, for lack of a better word, insane. We as an audience are left wondering whether or not to believe him, since he himself has called his plan “evil”, yet he means for us to feel sympathetic towards his motivations, and thus his actions. Throughout these soliloquies, we are left wondering if we can truly believe him, for we are not sure if he is playing mind games with us as well. Toying with us as he does with every other character throughout the play. This is what helps to make him a truly villainous and interesting character. For even in his moments of pure honesty, there is always the distinct possibility that he is somehow lying.
I completely with the concept that Iago is the central character of this play. The title serves to divert attention away from Iago, despite his playing the central role in moving the events along, just as he tries to divert attention away from his essential acts of instigation throughout the play itself. In regards to your commentary upon Iago’s sanity and how the text works to manipulate the reader, I think the answer is meant to be interpretable or ever-changing. I think this feature works to make the reader realize that sanity is always under the threat of successful manipulation.
I also agree that Iago appears to be the more central character of the play than Othello. It is similar to the dynamic in Julius Caesar in which Brutus is the true main character despite the title. The character with more dialogue and with more influence on the play’s events is unambiguously the more consequential. I don’t believe that we have to throw up our hands when trying to explain Iago’s evilness. I believe that it is a lot less mysterious than we have been treating it. As I said in my post, the easiest explanation is that Iago is a racist. The passage you mention shows Iago giving a reason for hating Othello which would be legitimate motivation if he spoke about it consistently or the audience saw any evidence of it being true. The singular mention of this vendetta indicates that Iago has probably not thought about his story more than once. He only knew that he needed a more legitimate reason for wanting to destroy Othello than pure, unfounded racism.