I just wanted to update my experience in this thread. We upgraded our test environment enterprise geodatabase to 10.4.1 SDE and the performance issues we had on our large land trac and vegetation layers disappeared. This was true for our 10.3.1 clients and upgaded 10.4.1 test client. That'll teach me for not going with the latest version (but 10.4 came out the week we started this project)!
For a test, I loaded the layers fresh (no spatial index tuning), and they were fast. I also backed out SQL server level changes and we made no changes to the underlying disk infrastructure. Unfortunately, due to the delay that trouble-shooting the performance issues caused, the project was scrapped for now.
My best guess, the issue for us was with the rendering engine or how the results of the query were fetched from the server. Something changed between 10.3 and 10.4. I think that ArcGIS was fetching the results in batches at 10.3 to render, which for some reason was abysmally slow, but at 10.4 it fetched all results then rendered. I base this in part on our testing with QGIS, which rendered the data fine connected to SQL Server, and near as I could tell fetched the entire dataset at once. I'm not able to prove this theory, if someone can, I would be interested in the results.
Susan