The weight/quality of your bike is fine for campus commuting. You could replace the sus forks with cromoly steel and ditch the bike stand for less weight.
Is the bike too small for you in length.?
To get more aerodynamic you can lower the bars, add some clip on aerobars or replace the bars with trekking butterfly style. Drop bar conversions are more trouble and expense than they are worth.
Toe clips are fine for your non-racing utility use.
You can fit larger rings and turn your bike into a double chainring setup but I would only do this when the rings are worn out. You will have issues with chainline and front mech alignment but these are solvable.
Panniers would reduce the pendulum effect of your bag swaying from side to side but if that isnt an issue, you should be OK. I find that bulky but lightweight items are OK on my back but heavy items are better on the rack. You can split your load.