Don't claim to be an expert can only post my personal experiences with the 718.
After many long sessions with some of my locals helping these are the results.
On Am carrier set to 10-15 watts no higher allows plenty of headroom for the audio
I repeat audio not SWING.
Mic gain at 10-15 with processor on, hold mic about 3" away and speak in a normal
conversational level as if you were talking to someone in the room with you.
Don't eat the mic and don't try to make it swing like a cb .
Talk across the mic not directly into it you should have clear and adequately loud
modulation.
I have run my 718 on AM this way for a lot of years & have had acceptable results.
As far as the ALC issue a short jumper wire between two resistors cures that issue.
It is a tight spot on the board to work but if you feel you can do it it works.
Check out mods.dk for the mod.
Hope this helps, had the 718 for a lot of years and still think it is a great little radio.