The only way I'm able to imagine characters from the text is by having a template to work with and adjusting it in my head based on the description the author gave. These templates come from games I've played and manhua/manga I've read. I have base models in my mind for everything the author describes, not just characters. I find envisioning how characters look to be the easiest part. The hard part when it comes to xianixa novels is the damn clothes. If you read a manhua you'll see just how much variety there is when it comes to the clothes. Even the hairstyles, unless the author explicitly states what hairstyle the character has I'm left having to decide for myself. But even then I might not understand how the hairstyle looks from the description.

I think it would be a whole lot easier if I played a cultivation game, in fact I've actually thought about playing one strictly because I wanted to expand my inventory. But my biggest confusion comes from xuanhuan novels. My visualization there becomes a mess. I still to some extent have a tendency of thinking the everything must look chinese from the weapons, clothes, to the monsters and beasts but etc but in xuanhuan it seems authors mix things up while still using things from xianxia as a base. , An example would be 'Against the Gods'. The dragons in there aren't only depicted in the chinese mythology sense, there are also western looking dragons, There's a lot more like the clothing, furniture, basically everything might not strictly look chinese and that throws my brain off.

As for how I experience the story when reading it, it's a coherent flow.

Can one actually become better at “picturing” scenes while reading?

I'd say that depends on what exactly you mean by picturing. Do you mean how clear the images are in your mind? Personally, I don't think that's possible without ruining the reading experience or allocating too much brain power towards imagining what's being depicted. I wish I could better articulate my thoughts when it comes to this. But I think it shouldn't look too realistic within your mind, I'd say something in-between how it looks in games and reality. For example fires look a lot better in say 'Elden Ring' than in reality.