how to adjust window decoration *and* font size settings in xenial

Objects of your interface are too big because your resolution is too low. You've got large 30'' monitor and only 1920x1200 resolution (as I can see on your screenshot).

Open the "Resolution" dropdown menu - it should contain 2560x1600 setting (which has the same size ratio as your current one, i.e. 16:10). Select it and press "Apply". If the dropdown menu line with 2560x1600 is not the last, and your monitor is able to sustain even greater resolution, use it.

And then, when your resolution will fit the native resolution of your monitor, you can use the advice you've mentioned in your question to adjust the DPI of your monitor properly.

Different GUI aspire to achieve resolution independence. This will ensure that all interface elements will look the same and have the same size on different device types be it phone, tablet or PC monitor. If you check the mentioned link, you'll see that GNOME isn't resolution independent yet. 1920x1200 fits well the 22-23'' monitor. If you use it on 15'' screen, all objects will be too small and you'll need to increase font size to get improved readability. In your case the screen is 7'' bigger than the proper one for this resolution, that's why you've got an opposite problem - everything looks too big.

If you wish to alter your font sizes, this may also decrease the sizes of your interface objects. Use GSettings configuration tool to achieve that. Run this command in your terminal:

gsettings list-recursively | grep desktop | grep font

In my case it returns:

org.gnome.desktop.wm.preferences titlebar-font 'Ubuntu Bold 10'
org.gnome.desktop.wm.preferences titlebar-uses-system-font false
org.gnome.desktop.interface document-font-name 'Ubuntu 10'
org.gnome.desktop.interface font-name 'Ubuntu 10'
org.gnome.desktop.interface monospace-font-name 'Liberation Mono 10'
org.gnome.nautilus.desktop font 'Ubuntu 10'

First key affects the window titlebar, third key sets Document font name/size, fourth key sets Font name/size which affects all interface elements (i.e. menus, panels, etc.), fifth key sets Monospace font/name which is used in your terminal. And the sixth setting affects the name/size of the font of your desktop icons (if any).

So, if I wish to decrease, say, the size of the font used on the panels by one (in my case 'Ubuntu 10' will become 'Ubuntu 9'), then I should run the command:

gsettings set org.gnome.desktop.interface font-name 'Ubuntu 9'

Adjust the sizes of your fonts as you see fit, selecting the proper schemes and keys with GSettings. If you prefer GUI tools, you can try Unity Tweak Tool, which can be found here.

I have no research to back this up, but I'm posting it because after looking for a week or so, I now believe it's true.

There are no configurable window manager decoration/chrome sizes in stock Ubuntu 16.04.

It's possible to configure the sizes of fonts, which can make some UI elements such as menus smaller, but the window manager will always draw the close/minimize/maximize buttons, for example, at the same pixel size. The easiest way to change font settings is by installing Unity Tweak Tool (unity-tweak-tool is the package name) and modifying them there; alternately whtyger's answer contains a command-line solution.

There is a mightier software for configurations than the unity tweak tool: compizconfig settings manager - ccsm! Download it from the software center or from the command line:

sudo apt-get install compizconfig-settings-manager

There you can change and configure almost everything you want. It's definitely the mightiest configuration tool around, which might be what you are looking for!