The blue smoke is oil being burned, probably from the turbo seals which is normal for a car with a lot of miles and not enough oil changes. How many miles? Has the PCV been cleaned out/replaced? When you get a quart low on oil, consider adding a bottle of Marvel mystery oil - that can clean up gunk trapped by the piston rings (so I have heard). For regular oil changes, synthetic is a must!

How about a good high revving highway run. Third or second gear at over 4500 rpm for a few minutes?

As for the 2008, it has the 6 cyl engine. The first year had problems delivering reasonable mpg because the tranny gearing and software were not matched well to the engine torque. The turbo model was fun, the N/A was adequate. It has a timing chain which is good, but the PCV and throttle body still need cleaning once in a while.

Moving from what state to what state? If there are stricter inspection guidelines in the new state, don't bring the 2004. If fewer, drive the 2004 there and look for a nicer V70.
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Keeping it running is better than buying new