Thanks guys for all the advice and helping me get on top of all this. For those curious, the reason I bought the car was that it was a manual wagon (extremely difficult to find), and cost $3400 with a new clutch installed. Granted, it has 300k on the clock, but we'll see how much I can squeeze out of it. And it's clean. really clean.
Actually, more clean than I thought. So I have to go back on my previous statement once again; this time I jacked up the car, and took a CLOSE look at the FCAB, and shook the wheels like Michael J Fox on steroids, and they don't budge. I should have trusted my mechanic who certified the vehicle. The reason why I questioned their integrity (other than the noise), is because when you look at the end of them - even brand new ones - they look like they've been torn up:
because I jacked up only one wheel at a time, there was no real telling if it was knocking noise was sway-bar related, as it was always under stress. There were no torn boots at least. I will continue my detective work, and it's good to know that my 3500 RPM highway driving is not abnormal, despite inefficient.