Seems to me like half of the people use default sorting, the other half use something else,
Technically, this shouldn't be a problem. How the user chooses to sort their content really shouldn't affect discussion in a negative way; if it does, it seems like there's a design concern.
since nobody seems to know where the quote button is
As with above, I have to wonder if this is a design thing or just a communication issue in general. I do see people replying to thin air a lot, and I doubt everyone that makes that mistake is incapable of basic logic.
every thread more than a couple of pages long is FULL TO THE BRIM with out of context posts and the conversation quickly becomes nonsensical.
This gets really bad in huge threads while in Discussion View. My personal (biased, admittedly) opinion is that view options would help a lot, since you could set comments so they are automatically all minimized or intelligently hidden based on what is considered to be important by the community. I made a thread on this a week or two ago, if you're interested.