The L-head was never put in the big cars for a reason! I have to tell you though, after driving a 196 powered 63 American for 15 years (initially a 1V, shortly upgraded to 2V, and with an upgraded cam when it was rebuilt... plus modified air filter housing and exhaust system) the 196 is barely adequate for the big cars. Mine put out about 170-175 hp in the end and it would keep up with modern traffic most of the time. I had an automatic with 3.31 rear axle (the "performance" ratio) but no air. The 58-59 Rambler Six wagon (the big Rambler) had a 3.78 rear gear ratio with standard three speed, 3.31 with auto (3.78 was optional), and 4.38 with the three speed OD trans. That's a bit lower than the American, so it will be buzzing at highway speeds. The little motor needs the gearing to pull the big car around. It's adequate, especially around town, but try holding 65-70 mph with a couple big adults on board and maybe a long weekend of luggage and it will strain pulling hills WITHOUT air conditioning.
It's a great little motor, and yes, the factory put in AC even with an auto trans, but there were few places you could cruise at 65-70 mph for long stretches until the mid 60s. The Interstate system didn't start construction until 1956, and minimal then. Most of it was still under construction in 1958. The six cylinder Ramblers were economy cars, as you mentioned, and not intended for high speed cruising. Keep speed down around 55 and it should hold speed up all but the steepest hills. The 196 would be turning ~2800 rpm at 65 mph with 3.31 gears, and that's a little high for the old 196. It's most comfortable in the 2000-2500 range (as are most AMC sixes with stock cams, even the 4.0L EFI six, but the bigger ones will pull with less gear). 60 mph is just a tad over 2500 -- 2566 rpm. That would be a lot better for it.
The 196 always uses a little oil, it's just the old design. Not too much, but it will use a quart every 1000-1200 miles when run hard (around 2500 rpm and higher). It will use a quart about every 1500-1800 miles regardless (which is just 1 quart between changes, assuming 3K mile changes). Run it at 65-75 all day like I have in the past and it will use a quart about every 800 miles. I mean on a 16 hour trip (made all in one day!) on the interstate. That's just normal for the old gal!