Nothing you've said is new. Owners have been tweaking the suspension and brakes since day 1, yet the FJR still grew and grew in popularity. The bike "has good bones" as the saying goes.
The Gen I in stock trim had an overly-sensitive rear brake that could easily lock the rear at any speed, especially if dragging a rear brake in the corners. My Day 1 mod was to remove the pedal from the shaft, rotate clockwise 1 spline and reinstall. This helped keep the rear spinning, especially important because heavy use of the front brake could lift the rear wheel off the ground (one-up, no cargo, dry pavement). I used Yamaha brand pads exclusively and was always satisfied with the performance. My 03 was on her second rear rotor and 3rd set of front rotors when I gave her to my son.
After a few years, the rubber lines get soft, leading to a mushy feel. SS braided lines are a great upgrade! I did the clutch too. Linked brakes were not available on any Gen I, they appeared on the scene in 06. ABS was optional and the rear especially was problematic. They need regular flushing and exercising.
Complaints about the rear shock preload were common. H. Marc Lewis offered pre-load spacers that were inserted on top of the spring after disassembling the shock, but those are long out of production. Simple enough to make on a lathe though -- they were just a steel doughnut in thicknesses around 1/4 or 3/8", and made a world of difference. The damping is also adjustable, but it's an overall adjustment -- compression and rebound are not separate. Aftermarket options abound and are quite popular. Also quite spendy.
Similarly, the front has adjustable pre-load on the top of the shock and may need some tweaking. For me, the sweet spot on the pre-load was 2 lines showing.. The damping on the front is separately adjustable. Turn the black knob on top all the way clockwise, then count the clicks as you rotate it counter-clockwise to reduce (soften) rebound damping. 10 or 12 clicks is usually a good starting point. Compression damping adjustment is at the bottom of each fork. Again, rotate fully clockwise with a screwdriver then count clicks coming back to soften. 12 or 14 clicks is a good starting point. Make sure all adjustments on both forks are the same!
Heated grips were not offered with the early bikes per se, but Yamaha did sell them as an accessory kit (they were identical to the Honda accessory kit, at twice the price!). And yes, the grips were like stone. Cut them off if need be, replace them with the grips of your choice over mylar grip heaters and retain the control pad if you want heated grips. Or go with your plan if you don't.
