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Crowning Moment of Funny: Fonzie's been using "Sit on It!" for years, to great reaction. When Marion of all people uses it on him, the reaction from the crowd and Fonzie himself was priceless.
Crowning Moment of Heartwarming: Joanie and Chachi announce their engagement. Howard, the father of the bride, walks up menacingly to Chachi- "Chachi, I'm going to say something, and I'm only going to say it once: I like you. Welcome to the family." and holds out his hand. Also, when they tie the knot in the Grand Finale, when Howard thanks the audience for being with his family through all these years, and says "to Happy Days."
The Scrappy: Chachi. He was popular with the teenage girls, but not so much with the older fans.
Seasonal Rot: It started out as a very cool, low-key show, then became the ideal version of a standard sitcom with a Studio Audience. It'd started getting worse (the Trope-Named Shark-Jump) even before Richie left, but got apocolyptically bad after that. Fonzie got a temporary full-time girlfriend for one season, and things got increasingly worse with gimmicks and nonsense until a thankfully fantastic final episode. Eleven total seasons, about four or five good.