In the main quest, I've recently finished Fang Lair and retrieved the first part of the staff.

I've been searching for side content too, but so far I've only seen two kinds of quests. There's "go deliver/fetch something to/from the other side of town," and "go to this dungeon and kill/rescue/capture somebody." I think I've had my fill of both. Aside from that, I've also completed an artifact quest and found the Ebony Blade.

Is there any other optional content in this game worth doing that I haven't described doing yet? Or should I stop smelling the roses and just go get the rest of the staff and get this game over with and move on to Daggerfall?

I still find the wilderness in Arena to be the most captivating of the older games. Though most of the more interesting setpieces are just sprites (shrines, standing stones), there's abandoned houses and http://dl.dropbox.com/u/1244212/DOSBox/acd_004.png as well. I'm not sure just how great of a challenge/variety they offer, although I would presume them to have level scaled enemies since I mostly encounter humans in them. There's also rowboats in the wilderness, which allow you to traverse bodies of water quickly and without losing fatigue. A relatively interesting concept that I wish survived into the later games.

Outside of that though, there isn't much. I myself tend to grow bored with the game after 3 or 4 staff pieces. Nobody will blame you for moving on to Daggerfall - plenty still play it religiously to this day.