Linux - KVM - very slow disk io
Solution 1:
The only obvious problem I see in your configuration is io='threads'. This is unlikely to provide better performance than io='native'.
Beyond that, I also don't recommend compiling any of these components (kernel, libvirt, QEMU) yourself unless you already have a deep understanding of them. Better to use a well-tested and known working package from a Linux distribution which has optimized it for performance and stability. RHEL/CentOS and Fedora work fine. I can't vouch for any other distribution.