WiFi/Internet Speed and Strength Question

First off, I know I should have 105 Mbps internet speed from my service provider.

Please review the agreement with your provider to locate the fine print that states that they will provide up to a 105 Mbps connection. Depending on the time of day and other factors, you may see one-third to one-half of 105 Mpbs speeds. At other times, like weekday mornings, you might see 125 Mbps speeds or higher.

However, connecting my Mac to my Time Capsule via Ethernet does let me connect, and I've found this way I have around 81 Mbps download, and 15 Mbps upload.

That is respectable. If you perform the same check at various times during the day, you may see speeds ranging anywhere from 50-125 Mbps, as I noted above.

Now, when I disconnect the Ethernet and connect to the Time Capsule over my WiFi network, while remaining right next to the TC, I find I have 18 Mbps download and 5 or so Mbps upload.

This indicates that the Time Capsule is having problems with wireless. Specifically, the wireless radio may be failing. Try powering off the Time Capsule for a minute or two and restarting to see if the same performance remains.

My TC is model A1355, and should be able to generate 105 Mbps download speed from what I've read.

The model A1355 was first introduced in October of 2009 and discontinued in June 2011, so your Time Capsule is anywhere from 4 to 5 years old or more. You won't like this, but the useful life of the A1355 Time Capsule was, on average, about 3 years. The wireless performance really heads downhill quite quickly after about 3 years of use.

Could my TC be too old to handle the better speeds in reality.....

Yes, quite likely.

Also, I have an old version of AirPort Utility yet on another computer, and in this version it was possible to change the Transmit Rate of my WiFi network being generated from the TC. I originally had the power set to 10%, but even going back and changing it to 100% did nothing for my internet speeds.

The Transmit Rate changes the broadcast power of the wireless radio. It would have nothing to do with the speed of the wireless if your computer is close to the Time Capsule. Speeds might improve a bit if a higher Transmit Rate was selected and the Mac was several rooms away from the Time Capsule....IF....the wireless radio was operating correctly.

Try powering off the Time Capsule for a minute or two and restarting it. If the slow wireless speeds remain. take the Time Capsule to an Apple Store.....if you have one in your area.....to let them take a look and verify that the wireless radio is heading downhill fast. If this is the case, as I suspect, then it is time for another device.

would you recommend one of the new TC's or Airports that Apple has come out with, or looking at another brand entirely?

I have used both the new TC and new AirPort Extreme for about 2 years with no problems. It is too early to know if these models will fall into the 3 year decline club as the previous versions have done.

I have been testing my speeds in a room a distance away from the TC while playing with the Transmit power settings, and I noticed that at 100%, the speeds fell to lower than even the 10% setting.

This could be an indication of a power supply issue in the TC as well. Ethernet speeds are not affected by this nearly as much as wireless.

I've also noticed another curiosity as well. I've had an older Airport Extreme (A1301) connected to my WiFi network, extending the network in an effort to improve WiFi strength and speed at the farthest point from the TC location, but I've noticed that when my Mac is a client of the Airport, I only get around 1, or less, Mbps for both download and upload. Staying in the same location, but turning off the Airport and becoming a client of the far-away TC, my speeds increase to around 5-10 Mbps. Would this be from the age of the Airport as well, the bridged network from the TC, or a combination of the two?

I can't say. What I can say is that the general rule of thumb when you "extend" a network using wireless, is that you can expect to lose about half of the potential speed capability on the network. So, in many cases, if you cannot use Ethernet to connect AirPort routers together, it is often better not to "extend" at all. I know that runs counter to what most people think, but I've verified this a number of times working on different networks, not just my own.