5 psi is not stock boost try 10-11psi. Some say 7psi but I did not see 7 when my TSI was in stock form with the factory boost controller still used.

Venting the bov to the atmosphere is not good. It should be recirculated unless you have some sort of supporting mod like a HKS VPC or you could get away with it using other mods but its still not recommended.

Is the turn signal switch broken? Maybe it needs another switch inorder for the lights to work.

Tranmission grinding is not likely to be the slave or master cylinder. These transmission wear and usually are the synchro's that go bad so with that said it would need a rebuild.

Starter continue to turn after the key is removed? I don't get it. Starter engages the flywheel to crank up the car and start it. Thats all it does, it does not continue running when the car is whether on or off.

A 1990 Eagle Talon TSI in that condition is probably worth $800-$1,000. Some may say different but I don't care if its turbo with all the problems you listed and condition it seems to be in its not worth an even trade.

Should look at 1991 if your interested in buying a turbo 1g DSM. 1991-94 share among the same parts except 1991 still had the 6 bolt engine. 92 pre May had the 6 bolt engine as well. 90 came with the oil cooler while 91- used the water cool to the oil filter housing. 90 has different sensors, different ECU, etc. While 1991-94 are pretty much exchangable. Parts easy to get for a 90... here and there given those parts are still going around.

Your Cordia seems to be a lot more reliable then this 1990 Talon TSI you speak of.