Can't click on Bookmark Toolbar option in Toolbar options
Bookmark toolbar always worked and I could turn it off or on but always left on. But now Bookmark Toolbar doesn't show and when I click on it in Toolbar options the check mark won't appear but Menu Bar still turns Off and On when I click on it. Restarted computer before this happened because trouble with mouse pad and got notice about Firefox 89 update but closed it because prefer Firefox 88 that has smaller Bookmark and Menu Toolbars
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I think Firefox 88 had the Bookmarks Toolbar submenu with 3 options, shown in this article: Bookmarks Toolbar - Display your favorite websites at the top of the Firefox window.
Is that sub-menu not expanding when you click it?
Regarding your Firefox 89 concerns:
The wider menu item spacing is a feature of the "Proton" redesign. I can give you a quick short-term workaround, but a more durable solution will require more work.
Temporary Fix
For testing purposes, the developers left a preference in Firefox 89 to switch between new style and old style menus:
(1) In a new tab, type or paste about:config in the address bar and press Enter/Return. Click the button accepting the risk.
(2) In the search box in the page, type or paste browser.proton.contextmenus.enabled and pause while the list is filtered
(3) Double-click the preference to switch between true (new style) and false (old style)
Some menus may be cut off or sized incorrectly after this change until the next time you do a normal exit/restart of Firefox.
Longer Term Community Workaround
This involves setting up a userChrome.css file. The full instructions are in the following thread: https://support.mozilla.org/questions/1337841