Most official translations - especially these days - are fine. The kind of people who have a problem with them are the kind who don't know any better. I myself was guilty of this 10-15 years ago! There was a link I saw some time ago, I'll see if I can dig it out over the next few hours, but it basically said something to the effect that it's the dumb people who think they're smart don't know enough to know that they're smart, but it takes a certain kind of smarts to know your own inadequacies. I've gained some of that over the years.
In the 16-bit era standards for localization were much, much lower. Some of the most common complaints come at the expense of Ted Woolsey's stuff, where liberties were taken or incidental stuff gotten wrong, but given both the time and corporate constraints he was working under, he did a marvelous job. They're good even compared to other localizations of the time, and I'd argue that they still hold up today, despite a few unimportant things (item names, monster names) he might have gotten wrong. Most localizations of the time were of reasonable quality, though. The further back you go, the lower the standards and consequently the lower the quality.
Of course, there are exceptions. Breath of Fire 2's been brought up, and yes, it is a *huge* mess. Another example is Assault Suits Valken, whose localization (as "Cybernator") removed literally half of the events where characters spoke, as well as (under corporate concern, I'm sure) a scene in the final level where the enemy president commits suicide. I'm sure the reason the speaking events were removed was that Konami corporate thought that they interfered with the gameplay (as they came up during the action, while the player goes through the levels, and they do not *halt* the action in the way all of the text that remains does) but it still removes a lot of character (and, uh, actual characters) from the story.
As far as changes to make a game less "foreign", it depends on the change. If it alters the gameplay balance, then it's probably not a good thing. (See: changing yen to dollars in Persona 1 for PS1.) Otherwise? I suppose it depends on how large the change is. If you're talking about completely altering the setting and the characters? Probably not a good thing. If it's more along fixing jokes that people wouldn't get? By all means, go ahead.