It might also be the upper shock mount. My 97 wagon suddenly made the kind of noises you describe (my wife was worried "the rear end is falling off"), and it turned out to be the right rear upper shock mount. Conveniently, you can access it from the cargo area, no need to get under the vehicle. Lift up the carpeting in the cargo area above the wheel in question. You will see the shock mount, it is kind of oval and held in place by two bolts. Bounce the car up and down a bit, and look at the mount, you might hear a rattle or clonk and see the mount moving. If it moves, it's broken. In my case, the fracture in the mount was very obvious.
One piece of advice should you need to replace the mount (it's inexpensive by the way). The two bolts (12 mm wrench) holding it go into nuts that are welded to the underside of the sheet metal. The bolts tend to be rusted in. I applied excessive force, and the nuts popped off the sheet metal... The bolt and nut were now spinning freely and I had to cut the bolt with my Dremel and get a new nut and bolt. A retention washer saved me from having to get a hold of the new nut from underneath. Try and avoid this drama by spraying the bolt and nut well in advance of putting a wrench to it. Use PBlaster or Liquid Wrench etc.
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'97 850 n/a Wagon, 125K mi