I've also been to both. I was also at LTT with and without characters. I would have to agree that Mama Melrose's in probably one of the more disappointing dining options in all of Disney (and frankly, most of DHS dining feels that way - except Brown Derby). Mama's felt loud, slow, and had the feeling that tables were crammed in everywhere making for a very tense, rushed meal. I've done it twice - once in October and once in November - and both times felt the same way. I also thought the menu was limited. Besides - I'm having sit down meals at Disney to experience new things...having choices of standard Italian fare really isn't that new and different.
Liberty Tree felt special the both times I was there. I had it for our Thanksgiving dinner one year, and it was just fabulous. There wasn't much selection, due to it being Thanksgiving, but the food was "homey", there was plenty of space for the chacters to walk around, and the service felt downright welcoming. Food was average American fare, but was good nonetheless. The second time I was there, was a regular day for lunch. The service was solid, there was plenty of space in the place, and they even took us a little early for our reservation.
My personal choice would be for LTT. For that matter, for my upcoming trip in Dec, I have scheduled dinner at LTT just before our attending MVMCP. I have two different partial days allocated for DHS, and in neither case did I schedule a reservation in that park. I will be park hopping out of there when it comes to meals.