The horrible disk problems that you describe are consistent with how that generation of Mac OS works. Let's say that there is 20KB free on the system disk and you wish to save something on a separate data disk. That cannot be achieved if the save operation (by the OS) needs to write 21KB or more to the system disk.
Windows does a similar thing today. When Internet Exploder downloads a file, say 1GB in size, it requires multiples of 1GB to download and save the file at its target destination.