Is it time to replace my 2016 MacBook Pro

I agree with @ku4hx. Plus keep this in mind:

• The 2016 laptop is now "Vintage" so repairs are only possible as long as the necessary part(s) are still available. In the event the part fails within the 90 day warranty period, if the part is no longer available, then their is no possiblity of honoring the 90 day warranty.
• macOS 13.x Ventura is the last version of macOS supported on a 2016 Mac. So Apple will no longer provide security updates to Ventura after 2025. Keep in mind some third party app developers will only support an OS which Apple still supports, so after 2025 you may no longer be able to update some third party apps (some apps, especially those accessing online services tend to need to be using the latest versions).
• This 2016 laptop is known to have a design/manufacturing defect with the Display Assembly...no idea if the replacement display corrects this....I have seen the same design defect in some later models which were supposedly "fixed".
• This 2016 laptop is known to have a design/manufacturing defect with the Butterfly Keyboard. Even if you don't encounter this flaw, this keyboard tends to still have key issues due to even just a small piece of dirt or liquid getting beneath the key cap.
• If you have never had the Battery replaced (or the Keyboard....they are all part of the same Top Case Assembly component), then most likely the Battery will need to be replaced soon...the laptop is about 7 years old....I've seen batteries fail or wear out in as little as 3 - 5 years. Expect about a $200 US cost. Theoretically Apple says they will replace a battery for up to 10 years, but the part must still be available. Our organization tried to get batteries replaced in MBAir (they are individual batteries...not glued in) and we had trouble getting them after the MBAir model went "Vintage". Sometimes we could, other times we could not. I would expect it to be even harder for a Battery that is part of a larger more complex component such as the Top Case Assembly.
• The USB-C ports after years of use become worn so that cables fit properly & will be loose. While the USB-C ports are on a small I/O Board, the part itself is inexpensive, it is a complex time consuming job to replace so labor will get you.
• If you have the non-touchbar model, then you have two extra potential issues. The SSDs in the non-Touchbar model have an extremely high rate of failure. A second lesser known issue is that USB-C ports on the non-Touchbar model are integrated onto the Logic Board so those loose ports are a huge issue requiring the replacement of the Logic Board.

Perhaps this will help you in your decision making process.

A lot goes into deciding whether to replace an "aging" MacBook Pro with a current MacBook Air:

• If you're doing a lot of video editing and/or batch photo processing, then the MBP would probably be the better option.
• The current (M3) MacBook Air can support 2 external monitors in clamshell mode. This used to be one of the larger deciding factors, but Apple has mitigated this pain point.
• The MacBook Air still has fewer ports than the MacBook Pro, so that's worth considering.
• Very few here would recommend any new Mac with only 8GB RAM or 256GB SSD storage. My recommendation has always been at least 16GB RAM, and as much SSD storage you can afford, since neither can be upgraded after the fact.
• I traded in my 2016 MBP last year for a 2023 M2 15" MacBook Air, and have been very happy with it. I have no issues with Lightroom or Photoshop, but do not do any batch processing. As I've retired since purchasing my 2016 MBP, I no longer need to run any processor-hungry apps.

Hope this helps.

'second' External display support, ONLY on M3 models, comes with a LOT of weasel-words:

M2

• Simultaneously supports full native resolution on the built-in display at 1 billion colors and:
• One external display with up to 6K resolution at 60Hz

M3

• Simultaneously supports full native resolution on the built-in display at 1 billion colors and:
• One external display with up to 6K resolution at 60Hz
• Close the MacBook Air lid to use a second external display with up to 5K resolution at 60Hz

NB>> 'Second external display' is only IN PLACE OF the internal display, not IN ADDITION TO the Internal display.

this just in:

Connect two displays to your MacBook Air with M3 chip - Apple Support

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Apple replaced the logic board in my 2016 MBP three years ago for $592US.

A new entry level 13" MacBook Air is $999. If my 2016 ever goes belly up again, I'm not spending any more money on it.

I'm looking at a Macbook Air as a replacement for this exact model. Rather than spend $3k I figured I could just upgrade the memory and hard drive on the air.