Slightly related to the issue of remembering addresses, I think the main issue is with the fact that local nameservers are pretty much non-existent if you're not running OpenWrt or OpnSense. Which is shameful because the local nameserver is an amazing quality of life tool.
Also the fact that officially there are no local TLDs except for ".arpa" while browsers won't resolve one word domains without adding http://
And don't get me started on TLS certificates in local networks... (although dns01 saves the day)
Well, there is Punycode, which, if I understand correctly, is a layer before DNS, which translates a Unicode string into a DNS-compatible ASCII string.
I don't actually recommend using that, though. Every so often, the ugly ASCII string shows up in places, because Punycode translation isn't implemented there. Certainly increases administration complexity.
Yeah I've heard about punycode. Personally, I'm well against it because it puts down non-MURRICAN English domain names as second-class citizens on the internet. If I have a website about Copiapó, a perfectly legal town, there's no good reason why the domain name should not be copiapó.cl rather than copiap-xcwhngoingohi4oleleiyho42yt4ptg4ht4.cl, making it look "suspect" and "malware-y".
There were quite some complains back in the time about Firefox choosing not to "flag" internationalized names as potentially dangerous, and pretty much all those complaints that I know of likely came from English speakers who simply can't understand other countries in the world even can have different alphabets.
I mean, there is some legitimate concerns. For example, in theory, someone could register a domain "αpple.com" and use that to send phishing mails. That "α" is an alpha. The more alphabets and letter variants you allow, the more lookalikes there will be.
But yeah, in practice, domain registrars check that you're not registering such a lookalike domain and then that's not really a problem, as far as I'm aware.