Welcome to the forum!
Briefly - It looks like you have relatively long legs and a shorter torso, so I like the 38R length, provided you get the sleeves shortened like you mentioned. If you had cut the vents open, this probably would drape better, but it looks like you'll need the sides of the jacket let out so that it isn't so tight through the waist. That's causing it to bunch in the back instead of slide over your butt in a more natural drape.
The shoulders look a little wide, but I don't think you could get away with sizing down to a 36R. It's just the cut of the jacket. The pants are way too tight in the seat, and you could consult with a tailor about whether there's fabric to let out there.
All in all, I would hesitate to stop suit shopping with this one depending on how picky you want to be. The armholes are high and the sleeves are very slim in a good way. You don't share how many suits you have or what your needs are, but if you're just getting one, I'd swap out for the navy.
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