We use the warning system in tandem with reports. If we find the content needs to be addressed, whether it's post content or something in their profile, we warn them right from either place. Not all of our warnings have points, and points can be adjusted manually, so it can be used for sending a conversation with no repercussions, plus it provides a paper trail of the action being taken. (A staff member starting a conversation with a user provides no paper trail that the rest of the staff can see.) When deleting content, too, you can enter a "reason" and that will be sent as an alert.
This is plenty. I don't want the report system overcomplicated, although there is missing information in the report system that should be there to help staff (we find we have to click through to a lot of side-investigations in order to arrive at a conclusion as to what to do with a post or profile). But that could be a separate suggestion, or handled by an add-on (which is already is, to an extent, but still not thorough enough for our needs).