I replaced the O2 sensor with a brand new one today. It didn't fix the problem, but it did change it dramatically. Now it doesn't have a problem idling, it just runs very uneven and low. When it was started cold it ran at about 1000 RPM, but when it warmed up it settled around 600-700 RPM, which is lower than the recommended 900. During idle, it would suddenly surge up to around 900... then back to 700, and back and forth, like it was making rash adjustments to something. It didn't threaten to die though, it just stayed "reliably" uneven. When pressing the peddle down, it would hesitate and lazily make its way up. so basically, the engine runs uneven. I tried unplugging the O2 sensor and like before it runs with no problem when it is disconnected, idles fine and does not hesitate. I again tried plugging it in while it was running at idle and it instantly went down in RPM and ran uneven.
Since the new O2 sensor makes the car run different, but not well, it leads me to suspect that the old sensor was indeed broken, but it was not the only problem. I read that when the O2 sensor is unplugged (or not heated up enough to be active) the system reverts to a rich mixture. Since it runs well when unplugged, could the rich mixture be covering up a problem in the rest of the system?