Milotic is a great water Pokemon if you're looking for a bulky water-type. It has a great amount of defenses, and a lot of HP; Plus, your ability will help significantly raise defense (50%) when inflicted with a status condition. When looking at your Milotic, I'm guessing you're willing to use Milotic more offensively since you have it holding Mystic Water, to help boost it's water STAB moves, such as Surf. If you do continue to use it offensively, I suggest replacing moves such as Hail and Mirror Coat.
Hail is a good move, but since Milotic isn't an ice-type, you will start to receive damage, and you'd find yourself wasting a turn because its a better idea to switch out, and Milotic would need to manually do it, as none of its moves can double with this effect. So, it's better to give Hail to an ally ice-type partner. With Mirror Coat, you would need the opponent to use a Special Move, but Milotic is much lower in Def than SpDef, so it's more likely to get hit by a physical move - plus, if Milotic's Marvel Scale ability is not in use, you can find Milotic getting easily knocked out. If you wish to keep Mirror Coat, the best idea is to have a faster-ally with a move like surf, so Milotic can resist it and still receieve the 2x power gain when it's its turn to move. So overall, you may choose to keep Mirror Coat if you wish to take a strategy like this, but I recommend replacing Hail with a move like Dragon Pulse, if you're using Milotic offensively.
In my opinion, Milotic is much better used defensively since it's very bulky, and Marvel Scale helps raise defense. Although it's HA Cute Charm works much better, to make use of Marvel Scale, maybe try using a Flame Orb instead of Mystic Water, therefore you can raise your defense but lower the unnecessary attack stat. You may also continue to use attacking moves, but definitely try using Toxic or a Rest/Sleep Talk combination.
Starmie is slightly more of a sweeper, since it's base Spd stat is much higher. It does still provide moderate defenses, but it should definitely be used offensively. Abilities like Illuminate and Analytic are very useless in terms of battling (unless you wish to choose Analytic/Trick Room), so Natural Cure is the ability to choose. You want to give it strong STAB moves like Scald and Psychic, and other strong moves like Thunderbolt or Ice Beam - although you can mix around with other strong moves and possibly status moves.
Overall, your decision should be made based on a overall look at your team. If you think you have a lot of bulky defenders, then definitely use Starmie. However, Milotic can work great either way, but choose your moves based on your battle style. For example, for 1v1, give Milotic Surf, but Scald for 2v2 unless you have a partner with good defenses/resistance to water, or an ally with an ability such as Water Absorb. But in my opinion, I would choose Milotic > Starmie, but distribute your EV's more appropriately to your style rather than having a little bit here and there (for example, use SpAtk EV's but not Atk EV's if you don't have physical moves; and Milotic is much better in SpAtk).
Hope I helped! :)