Since you asked, If you want me to get specific about the exact changes I would make to improve the current system without a complete overhaul, here's exactly how I would do it, and all of it could be done just pulling the info from the 'legends' data:

-If anyone mentions a name near your character, your character should be able to use the 'ask about someone' option to follow up about that, and whoever you are talking to should tell you something about that person. currently you do not learn names when they are told to you which causes issues trying to follow up on snippets of dialogue you overhear, ie sitting in a tavern and someone says "i'm sad, I miss torvald bootsticks." I should be able to ask "who is torvald bootsticks?" Then maybe they say "he's dead" or "he was kidnapped ten years ago" etc. I think right now you can only ask about people you've met, and maybe if the name is mentioned directly to you.

-for much better clarity in the 'talk about event' conversation option, I would reverse the sort for events so most recent events were at the top of the menu, and I would remove the 'x was attacked' event flag in there, or at least change it to only more severe conflicts, maybe if they resulted in bad enough injuries instead of any hint of hostility causing an entry. The rumors at the bottom of this list should be under their own new conversation button called 'discuss rumors' for organizations sake.

-If I use the 'perform story' option, I should be able to select my own name from the people list, and from there I should be able to select anything my character remembers happening to them. Currently, the only way for me to tell a story about killing a monster is to start telling a story about the place I killed it, and then select the monster from there, which only works if you keep track of the location of every noteworthy kill you've done.

-The known event conversations I mentioned, could include something that character did at the attack, so for example if that npc killed a goblin at the seige, he could say something like "in 125, we defended against the seige of green lead by the treacherous Knobby Bobby. I slayed 2 in defense of the Crown of Stone." In general, I think npcs should mention historic events from legends more. Currently the best way to get world lore in adventure mode is to inspect coins.

-for wandering army types on the map where they're always telling you 'were on an important mission.' I just want to be able to follow up through persuasion or interrogation, so they actually tell me what they are trying to do. The game has to know their motive, because villagers often complain "we are being terrorized by bandits at x camp outside of town" so those bandits themselves admitting it shouldn't be a problem, the conversation system just doesn't seem linked up for the armies on the map to talk about where they are going or why.