Personally, I wouldn't worry about your "bogging" your computer down with data.  This is a MYTH that is perpetuated by people so often that they almost have knowledgable people convinced that this is a plausable souce of problems.  IT IS NOT.  I won't go into the technical end of it.  Rather, for your purposes, know that you could one MILLION copies of all of the text you have written and scatter them throughout your hard drive, and your computer's performance would not be adversely affected.  And, yes, you have the space available to perform such a hypothetical operation.

>First...my symptoms are quite easy to describe...
There's something eating up your processor.  I found the same problems when I tried to get your computer to work with too many things at once.  AOL is the likely culprit.  There aren't a lot of other things running in the background that you can do without, so there isn't much that can be done.  I upgraded your RAM years ago, and that's what's keeping it from crashing outright.  In effect, I attached a trailer to your truck.  Now your computer can carry a bigger load all at once, but you still have the same engine.  It won't collapse under all the weight, but it can't get anywhere very fast... even moment-to-moment things like typing will lag.

>And lastly, my conclusion that I am "blogged up" is NOT conjecture.  Whether it is or not I don't know, but a "caveat" appears when I go to my "Filing Cabinet" which warns me that my cabinet is overloaded and unless I purge the file everything will slow down.
It is conjecture on their part.  Consider how I jam-pack my hard drive at every turn.  With the exception of a few isolated cases that I won't go into, the computer does not have to deal with this extra data.  To return to the previous analogy, unless you actively "load" (literally and figuratively) this data, you can think of it as gravel in the quarry.  It's just something sitting by the side of the road.

>Perhaps they are trying to get me to go to the higher (9.0), although I don't see how that earns them any money.
It allows them to display more dynamic content (e.g., Flash media, etc.) that earn them bigger advertising premiums.

A lot of the confusion about computers is that they are a black box that people have trouble understanding except through analogy.  With enough use, a naive intuition forms out of perceived patterns.  Unfortunately, this is sometimes just as fallible as reasoning through analogy.  For example, say your computer locks up at a certain point when you boot it up.  Would you fiddle with the volume knob on your speakers to try to get it to work?  Probably not.  You would likely guess already that your speakers unrelated to the processes involved.  On the other hand, you will likely see problems as a computer gets older.

There are three reasons for this: 1) You have upgraded to more sophisticated software while retaining the original hardware (except, perhaps, for a RAM upgrade, as in your case), 2) You accumulate more data in the form of old emails, downloads, etc., and 3) You accumulate more junk files related to the operation of the computer (including but not limited to .tmp Windows files, cookies, cache garbage, aborted installations, incomplete uninstallations, etc.) that are usually (but not always) deleted.

The problem comes about when causal users confuse these parallel processes.  Note that #2 has very little to nothing to do with slowing down your computer, but it is the one over which you can exert the greatest influence.  As a result, that's what people attempt to address.  It's a superstition, and usually voodoo dolls and tying strings around your finger have better results than deleting old email when it comes to addressing the problems you mentioned.