Looking at their figures the CB350 is 5% more powerful at 600rpm less and has 10% more torque. That doesn't sound much but in this category it will make the CB350 feel a lot more urgent and dynamic. I believe the CB350 also weighs less at 181kg compared to 195kg of the RE. That's over 30 pounds in yank money, a fair sack of potatoes.
But if you want a bike that looks like an early 1960's thumper from a distance the RE is the one to have. Nostalgia is a strange thing, we get drawn to things we understand and recognise from our own lifetimes. I'm not sure young riders even in India will continue to go for the classic style, seems the meteor with its Harley silhouette will be a better seller there. How are old Redditch factory photos relevant to a youngster in the Punjab? RE's are popular in India because until recently they were the largest capacity bike available and the import tax system still makes import bikes out of reach to most.
I agree about your comments on the Int 650 versus the 500 UCE. Nothing is better on a lovely summers day chugging around the back lanes on a brit style single. I love the vibes even. It's when you have to go somewhere much further afield using A roads that the plot falls apart. You can do it, but it's tiring and a bit boring, dare I say a little dangerous too...