Honestly, I was also unsure whether or not to include the Gentle Fist technique - or whether to include something like a Stunning Strike instead. Lately, I've seen some arguments - specifically in the context of the 5E Monk - that Stunning Strikes are just kind of bad design, because it sucks when they don't work (especially if they have a resource cost), and it also kinda sucks if they do work, because now there's a creature that just can't do anything, which is boring. In the end, I figured that the Gentle Fist is ultimately more iconic to the class fantasy of the Monk than Stunning Strike is.
Gentle Fist is potentially too powerful, but like you said, the Monk's design is such that they have a need for good Strength, Dexterity, and Constitution - so that helps to limit its power. I was also intentionally in my design of making all the physical stats a priority, rather than give them something like a finesse feature for their unarmed strikes, so that they would be able to dump Strength. Part of my conception of the class fantasy of the Monk, is that they should forge their bodies to perfection, achieving maximum in all their physical stats if possible (ideally, they should also be very wise, to fit the archetype, but I figured that was a more tertiary concern).
And yes, Iron Palm is intended to only give a bonus to attack rolls, as the 7-9 talent serves to boost their damage by increasing the number of dice they roll for damage. My original design gave the Monk an increasing number of attacks, but after watching the Ranger Design livestream, I came to appreciate Kelsey's intent in avoiding multiple attacks to preserve the action economy. I was still attached to the idea of increasing the number of dice rolled, rather than increasing the size of the damage die (to d6, d8, etc) because I thought that it could still reinforce the image of a "flurry of blows" - but it could also just as easily be interpreted as one really powerful punch or kick. One of my more recent drafts accomplished this by giving the Iron Palm an exploding dice mechanic that scaled with level - but I ultimately settled on having it expand through the 7-9 talent instead.
This gives the Monk basically the same level of accuracy as a Fighter, with a lower cap to damage (3d4 vs the Fighter's 1d12 + 6), but a higher minimum on their dice rolls (3 on 3d4, vs 1 on the d12). So the Fighter is still the King/Queen of melee damage, but the Monk competes with reliable damage, accomplished through a unique dice mechanic.
Hope that clarifies things. Thank you for your thoughtful comments & questions!