critique my setup -- weak link? best way to improve?

There are two school of thoughts. Start with the source (the sound can never be better than the source gives you) or start with the speakers to get the overall sound you want for a given room (each speaker has its own sound signature). For my first system way back when I started with the source. For my current system I rebuilt it starting with the speakers. Given you current system I would start with investing in speakers to match your room setup and the get the sound you like. I suggest you go to various retailers and listen to a few and narrow it down based on eh sound you like. Curious as to the cart you you use on your TT? Good luck in your upgrade journey!

Ditch the Crapazon cables.

the thing to do now is play music that you love and enjoy your system

I build high end from scratch and know a thing or two. as mentioned get a nice preamp. Class A is probably the best sounding. The problem with passive and tube preamps is they have trouble driving a 10k /20k load on todays amplifiers. in the old days the amps were 50k to 100k input tube amps. now i have seen 9k inputs. and your passive is in trouble as it cant pass current. with the correct preamp the bass and lower mids should tighten up and sound clearer. so i would recommend getting a Schiit Saga 2 Class A, Zero-Feedback, Differential Preamplifier for $279 it even has balanced outputs if needed.

How much do you want to spend? What kind of sound are you looking for?

You can upgrade your KG2 to KG3.2's on the cheep also there are a ton of upgrades for these speakers that make a huge difference. 

While the T1 is a ok TT, there are also upgrades for that, really you don't want anything with a built in phono, there are a lot of low cost good phone pre's out there.  You can also "upgrade" to a Carbon Debut Evo, but not sure how much of a real upgrade it is. Best bang for the buck there would be to upgrade the cartridge. What do you have now? My first TT was the Debut Evo, once I upgraded the needle it made a huge difference. I have the Suimko Rainier cartridge, a simple needle swap to the Olympia needle, was so worth the cost. After a while decided I needed a quieter and more robust TT, so upgraded to X2, so happy with that. 

Blue Jeans cables are great, don't let anyone else tell you otherwise. And upgrade would be to get their speaker cables as well.

Not sure where you live, but Craigslist and Facebook Marketplace are great places to pick up good used gear. I see good TT's, phono stages, a ton of Klipsch speakers.