Runs well, but is this much AFR "noise" normal?

[Bluehaze]

Like the title, the car runs pretty well considering I have only been tuning on the roads using VEAL, also trying to finesse the advance table to get the best feel from th motor, especially under power. By running well, I mean smooth and with a reasonable amount of power.
Background:
186 in2 Holden inline 6
Non-Crossflow head with plugs to side
Flat top pistons
Port injection using later model intake runners
Batch fire
Direct coil fire with locked distrubutor
MS code 2.905

I've done about 500 kilometres so far, and fears of melted pitons have abated. My AFR feedback kinda tracks with the target AFR now, and I've been playing around with the Smith prediction thing on O2 correction. (My O2 sensor is about 1 metre (3 ft) from the outlet). My plugs tell me all is well in the chamber, they have a tan/pink insulator and nice clean electrodes.
For idle, it needs to be around 550-600 rpm,(the standard torque converter gets "grabby" above this), which needs to be at about 12 AFR if it is to be smooth. I put this down to the geometry of the combustion chamber and the batch-firing factor.
This I'm also starting to think is the reason why the AFR gets jumpy at certain points.
I can see the feedback is generally a bit richer than target, which does not worry me, as well as the odd unwanted AE popping up to make a rich dip soon after.
I'm throwing this over to wiser heads;
-Is this jumpiness in the AFR a symptom of a not so efficient chamber design, or is it noise?
-Also, can I ise the time between the AE spike and the rich dip to determine transport delay?
Just an aside, before I started the EFI journey about 12 months ago, the nice plugs would have been enough for me. MInd though, it's been a lot of fun!

[Matt Cramer]

This could be noise or it could be intermittent misfires; what sort of O2 sensor setup are you using?

[Bluehaze]

Hi Matt
I'm using the LC1. Previously, it was supplied by a noisy circuit (pumps and ignotion coil). This made it flip out altogether. After re-calibrating and connecting to a dedicated circuit, I've had much improvement. I'm not noticing misfires, but in the log, I see the rougher parts of the feedbach are mostly associated with high rev/low pressure. When going down hill off throttle. I've thought about perhaps adding more vacuum advance here, thinking the exta lean mix is not burning properly.
Or going down the noise path, I was considering connecting a capacitor to the main fuse connection under the bonnet to filter any noise there. My battery is in the boot, and despite having a really thick cable feeding in, I'm thinking the noise from the alternator might be a problem.