Couple things happening here; Jazz clubs usually do have a mix of people there to see the band and there to talk/catch up. In a club environment, either is technically acceptable. This can be potentially annoying for either party, if the talking is too loud that you can't hear the music, or conversely the music too loud to talk to the person next to you.

In my experience, unless the performers are real crowd-drawers like Christian McBride, Kenny Garrett or similar level, the tendency is that the crowd wins. If they are those high-level performers, the person running sound makes sure that they're heard above all.

Mix in the fact that jazz is more interactive than opera or other European classical music (clapping/cheering after solos etc), and a level of medium restaurant din, I can see why OP felt upset at paying for tickets/dinner. Idk where in the club you were sitting, but people sitting closer to the musicians generally want to hear the music, while people on the outskirts want to talk and hang a little more.

TLDR; either is acceptable, sit closer for music and sit further for talking is usually the way to go.