This is strange but ... if you open and then close the library tab, LW performs better than if you have it closed from the start of a session. The hanging-for-a-bit-after-every-download problem goes away.

If you exit LW with the library tab hidden, and then restart, and have tens of thousands of files in the download directory, it will freeze for a while after every completed download. If you then show the library tab and hide it again, this freezing behavior stops occurring for the remainder of the session.

Strange.