Goulds should retract that statement. Never put any valve except a check valve in your suction line. And the check valve should be as close to the well and as far away from the pump as possible.
If you have bubbles, you have an air leak. The reason the air goes away when the pressure gets up higher is that the pump is not pulling as hard and is less likely to pull the air.
Five gpm is not a lot of water from any well, but maybe your pump can't do more than that pulling from 16 feet. A pitcher pump should do easily 10 gpm if the handle doesn't kick back at all.
Forget the vacuum gauge, it will just confuse the issue. As long as the water level is less than 25 feet, the pump will get all it can within it's limits if the well allows and your pitcher pump report sounds like you have a good producer.