80 bits always seemed a strange choice for floating point, but as soon as you said there’s a 16-bit exponent and a 64-bit fraction part, it made sense.

I assume microcode was a choice for both ease of development/testing/changes and saving die space. Would there come a point later on where performance could be gained by converting the microcode into a full set of discrete logic, or is that not worth the effort?

Usually, it's not worth the effort of converting microcode into discrete logic to get performance. Among other things, it's a mess to try to fix a bug.

A few exceptions: The different models of the IBM System/360 mainframe are almost all microcoded, except for the high-end machines, which were hard-wired for performance. The design of the Apollo Guidance Computer is microcode, but the implementation is discrete logic. The 8086 and derivatives are microcoded, except NEC created a faster hard-wired version, the V33.