I stumbled across this quote from a German soldier when reading about the death of Quentin Roosevelt (Teddy's youngest son), it talks about how Germany tried to use it as propaganda, but it backfired.
This young officer told my brother the following in substance, concerning the effect upon the Germans at the falling of your son Quentin. That when he fell the fact was heralded throughout the German army, and throughout the Central powers. That photos of his grave and his wrecked plane were published and exhibited profusedly far and wide. That the German authorities believed it to be good propaganda, with which to hearten both the soldiers and the people at home. But that it had the opposite effect and produced as far as they were concerned a negative effect or result. That no sooner had Quentin fallen but that it was whispered from ear to ear, from trench to trench. That in it one could see how in free America everybody was fighting. That though America was in the war only for a short time, the son of an American President, engaged in one of the most dangerous lines of service, was lying back of the German lines, while their country had been at war three years and that neither the Kaiser, nor any of his sons were ever so much as scratched. That it gave the soldiers a vision of the democracy of America, and helped to deepen the feeling that they, the common soldiers, were only cannon fodder for the Kaiser. That it made real to them the difference between autocracy and democracy, of which they had heard so much. That this feeling spread like wild fire, not only throughout the army, but also among the people at home. That those elements in Germany that were opposed to the war seized upon it and en- larged the suggestion. This young officer de- clared that in the judgment of many this was the largest single factor in the breaking of the morale of the German Army.
I couldn't find other sources about this example specifically, but in a general sense, did the average German soldier resent the Kaiser, and was this a factor leading to Germany's defeat?
German morale in the West had been wavering after the Somme and Verdun, but it began a steady decline after the end 3rd Battle of Ypres in late 1917, briefly revived by the Spring Offensives. From the Second Battle of the Marne in July 1918 onwards it was in rapid decline, and while the 'mood' of the frontline soldiers fluctuated greatly, the 'spirit' of the units as a whole was badly shaken by the heavy losses of autumn 1918, and by the Peace Overtures in November. After this, as Alexander Watson describes in Enduring the Great War, cases of Junior Officers leading their units to surrender increased, with only the Armistice bringing to an end potential disintegration.
As to the Kaiser, no doubt there were many soldiers that looked up to him, as evidenced by postwar Freikorps units that advocated a return of the monarchy, but opinions likely varied greatly, with unit bonds, family connections, and the pursuit of victory playing a greater role in the overall morale of the soldiers. Crown Prince Wilhelm was an army and then an army group commander in the war, and both he and his father would have made official visits to the front like mot other leaders and commanders in the Great War. His younger sons, specifically Eitel Friedrich, Oskar, and Joachim were all officers in the war, saw combat, and in the latter two's cases, were wounded and decorated. Considering that one officer is making the claim in the quote you've posted, I doubt the effect of Quentin Roosevelt's wounding was very great.