If you are getting clunks/bangs, something is wrong. Check bushes, sway-bar links, strut mounts and bump-stops. Verify the shocks are good, esp. if they might have come from a wrecked car. Tie rod ends are common but easy to test if you jack the car up and wiggle the steering. Ball joints, idler and steering box too. If there is no wear and tear down there, check the bump-stops are not too long or too short for the springs- and that the shocks are correct too...

But also, appreciate that a lot of the problem with this kind of question is perception-based.

It takes years of driving on different surfaces, and years more driving different cars to really get much idea.

e34 is basic by today's standards, but was ahead of its time (not as much as the e39) but the design/components far simpler & cheaper to maintain.

To me it is more than capable, but poly bushes, 17s and 18s are not good if you rate any road-comfort in your desires.

For my type of roads and bent, 16s on 225/55 tyres are an optimum balance. 235/45 on 17s and larger just don't compare unless on the track. Koni sports and Billies are too harsh for most but bed in given time.

Also too many people modify spring, strut and bump stops combos to just drop suspension height. They do not get the right bump-stop density/size to deal with reduced travel and the reduced height gives the new components no hope of absorbing undulations with finesse. An e34 is a limo by design, not a sports car. To make it handle the best thing to do is emulate the M-tech and M-car setups. Doing anything else takes research, care and dare I say it, engineering beyond what BMW applied in the first place when delivering the numerous combos they delivered off the line for each geographic market.