You just missed the entire point of having an upgradable hard drive in the PS3. The option is there for you, I added an SSD and I'm glad I did. It not only benefits XIV, but every other game I install to the hard drive also loads faster and plays smoother.
And you miss the point of playing on a console. Sure it's an option but the game is optimized for the hardware that everybody else has, so you don't have to worry about that kind of stuff.
As for the topic of this thread, I have set everyone else's effects to low (or whatever the middle setting is named) and haven't had any problem with monsters not loading so far. Maybe it's the right answer! Personally I use wifi without issue, but in case of lag I bet that plugging in an ethernet cable instead could help.
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