This space doesn't appear to have an air vent for the dryer.

If you put something in between the source and the structure that can absorb the vibration (eg rubber soft enough to absorb and diffuse the vibration), it'll substantially decrease if not totally mitigate sound transmission due to impact.Mid range and higher sounds are pretty easy to stop with decent insulation, closing air gaps, and mitigating propagation.

The comps are actually quite bad as the prior owner and I have put a ton of renovations into it to make it really high quality (particularly compared to other houses that get beat up from the rental season and/or run down from the ocean air and wind).So are we just stuck with this property likely unless we want to sell for a much smaller gain?

I love renovation loan for the owner-occupant buyers and for investors the best buy and hold property if they can find a deal is to buy, fix it up themself and add in the property what's required in the area to be able to give more amenities to the tenants: washer/dryer, extra baths, central air, open concept kitchens with islands, etc which automatically raises rent values and ultimately property values.

Also, are there ways, if the tenants leave on their own, to convert from rent control to Air B&B or something to get the rents to up to market value, they are currently insanely low.

If the agent doesn't have time or patience to show you how he/she reached the conclusion then get someone else who can show you step by step whatever you need to know .You can ask them before you use them if they're ok with a beginner like you who needs some explaining along the way .I also recommend reading books, listening ,to podcasts, watching you tube video's and of course bP forums .Don't forget the BP tools ,estimator for rent ,rehab etc. it makes things much easier.

Sometimes it is what it is.Here in the South (New Orleans), the three times I've had tenants get outrageous with me about repairs was related to air conditioning. 

It has some Termite damage (common in the area) asbestos siding, active Knob and Tube as it is an older property, and some cracks in the foundation etc etc etc.

Or you could look for strong rentals near the Air Force base.

$35,000 sounds like a plucked from air, slap in the face.