But ever since then bootconsole (initial boot) is nothing but gibberish.
I've not tried those instructions to update my Yun, so I can only guess at your issue. I am also assuming you are using the YunSerialTermnal sketch in conjunction with the Arduino IDE Serial Monitor to view the output.
It looks like you have U-boot configured for 250000 baud, and Linux set for 115200. Because you have the YunSerialTerminal's connection to the console port set to 115200, the initial U-boot output is unreadable. You need to change the speed that YunSerialTerminal is using to talk to the console port to 250000 in order to see the U-boot output. Of course, this will make the later output unreadable, but it may give you a chance to change the U-boot output speed.
Note that it is the Serial connection between thevYunSerialTerminal sketch and the Linux console that must be changed, this is NOT the speed between the Yun and your computer - changing the baud rate on the Serial Monitor's drop down list will do nothing, as that is only changing the speed between your computer and the sketch, and it is the connection between the sketch and the Linux side that is the issue.
After you start up the YunSerialTerminal, and connect to it with the Serial Monitor, send "~2" from the Serial Monitor - that will set the YunSerialTerminal to talk to the Linux side at 250000 baud. If you then press the YunRst button, you should be able to see the initial U-boot output as readable characters. If you let it continue, eventually you will get past U-boot and and into the Linux startup messages. Those latter messages will then be garbage because they are coming out a 115200, and the YunSerialTerminal sketch is trying to read it at 250000.
While the latter part of the startup process will be unreadable, this will let you see the initial messages, and will let you interrupt the startup process and enter the U-boot command line. At that time, you can try setting the U-boot baud rate to 115200 using the setenv command. Once you've accomplished that, the startup messages will once again be garbled - send "~1" to the YunSerialTerminal to set it back to 115200 baud.
This wouldn't matter so much except in Linux I can't vi edit anything as there are garbage characters, and even with ls -al.
That ls output looks normal, I don't see any garbage characters. What I do see are escape sequences used to set the text color to color code the various files, directories, links, etc. This is normal. I suspect that you are still using the Serial Monitor at this point. Serial Monitor is a very basic terminal emulator, and does not support these escape sequences. It also has a limitation that it sends data a full line at a time, rather than individual key presses. This will make using vi intolerable as you won't be able to send individual keys, and vi makes use of a lot of escape sequences to control the screen. The Serial Monitor is designed for very basic serial communications with a sketch, it is not designed for more sophisticated uses like a Linux command line. You need to use a more powerful serial terminal emulator application (I use PuTTY on Windows, but there are lots of available options.)