Having the overlap turned on would cause more density in areas, it's usually turned off for processing and not needed. You should also turn off Low Noise and High Noise as these are errors in the data (bird flying over or something like that). It sounds like you are creating a DSM, that shows the heights of things. If you are looking for building heights, I would run the Classify LAS Building tool and the do a selection of just the building, ground and water. If you want to include the trees and other points, run with the noise and overlap turned off. Use the LAS Dataset to Raster, I tested this and it worked with this VGIN tile: USGS_LPC_VA_West_Chesapeake_Bay_Watershed_Lidar_2017_B17_LAS_17SPB150490.laz, be sure to use Convert LAS to get it into LAS format first (turn rearrange option off).