Well, Banjokid, you’ve opened up quite a large topic this time! Since this forum is not suited to voluminous answers, I’ll stick to a few main points.
The major part of what people call “good tone” is based on the hands and mind of the player. Playing with clarity by hitting only the strings and frets you mean to, with just the right amount of force, is usually considered a necessity for “good tone.”
When I say “mind of the player,” it’s because I think people who play with good tone have a clear idea of how they want their instrument to sound. If you listen to players with tone you really like, the sound of that great tone will etch itself in your mind—as it’s etched in theirs. The more devoted you are to that sound, the more you’ll tend to be able to make it on your instrument. I know that may sound inexact and mysterious, but I find it’s generally true, and rather than trying to explain, I suggest you think about why it is.
One other important factor is the instrument itself. Of course, a fine instrument can sound better than a less fine one, but in general, I think that’s outweighed by the skill and devotion to the tone of the player. The way the instrument is adjusted (“set up”) can sometimes be an important factor. For example, a banjo with its bridge in the wrong place, or with a tendency for strings to buzz, or the head quite loose, or the strings quite old, might be hard to get a good sound out of. So proper adjustment by a skilled luthier can remove obstacles to the instrument’s ability to sound its best.
Then it’s up to the hands and the mind of the player.
In your case, I can only give these principles. If I could hear and watch you play, I might be able to make suggestions. If you can make it to one of my camps, or a workshop at a festival that I’m at, I would be glad to watch, listen, and make suggestions. But if you read what I’ve written and think about it carefully, it might be enough to lead you to get a tone you like better. Good luck! —Pete