To sum up, and as reductive as it sounds, the art produced in ancient Egypt followed the fashion of the time. If I’m going to pay someone to produce art for me, I’m going to want it to be the best of what everyone else is doing. Certainly there may have been those capable of producing what we would recognize as “more realistic”, but they weren’t being hired to do that, yah?
Egyptian paintings are frequently accompanied by hieroglyphs and the paintings should probably not be viewed as art for art’s sake, but rather as about conveying information visually. The heads of the figures need to be side-on since the viewer is observing interactions between the figures in the paintings. The bodies of the figures facing the observer may be to maximize the given visual information, making it easy to identify who the figures are by what they are wearing. It also gives a good view of the distinctive Egyptian Usekh neck collars.
The Egyptian pharoahs were semi-divine intermediaries with the gods who owned all the land in Egypt and ruled for over three thousand years, so there may be an element of the stylized artwork, largely used in religious contexts, using order, conformity and symmetry to convey timelessness and unchanging rigidity.
The Greeks of the earlier Archaic Period were influenced by Egyptian art, most notably in sculpture.
Left: Egyptian; Right: Archaic Greek
However, the ancient Greeks were very independent-thinking, which led ultimately to the great exploration of the arts and philosophy of the Classical period.
There’s a hilarious scene in Asterix and Cleopatra (the comic book) where the Queen is complaining about her new portrait not being (IIRC) “realistic enough.” To which the Court Artist replies “Oh, well, you know what I think of modern art…”
Cleopatra was, of course, Greek, not Egyptian, so that may have had something to do with her critique.