Wireless transfers are slow. There is no other way to say it. It doesn’t really matter how you have everything configured (within limits) because the speed isn’t going to be as fast as a wired connection. As long as you don’t have your MBP and TC on the outer edges of your wireless network you should have maximum speed (as pitiful as it is).
As for your second to last question, no there is no way to have it do a “sideways” transfer. Everything has to go through your wireless router. As far as your computer and TC are concerned they aren’t sitting next to each other, they could be at any point in the radius of the wireless network.
And your last question: yes, you should be able to configure the TC to extend the signal from the other wireless router. I forget exactly where the settings are inside of AirPort Utility but they are there.