The Basic Eight are definitely the best arcs, but I think the Die Killing Arc is basically mandatory, especially if you plan on reading Umineko after Higurashi. From what I’ve heard, the God Shaming Arc is as good, and is the main draw of Hou.
Funnily enough, both of them feature a more extensive look at Hanyuu, although I’m not sure that God Shaming Arc is canon.
Anyway, I’ve always considered Gods, Witches, and Yokai to be essentially the same type of being in Ryukishi’s works, considering their similar powers and similar reliance on human belief. It makes more sense to me than Hanyuu being an alien within a fictitious story within Umineko.