Lately I've been riding around the city a lot on my 1980 R65, with a lot of stops and starts and quite hard acceleration.
With your riding description, you're probably getting the best you can from the R65. Same with four wheels -city driving just takes more fuel. Lots of automobile and pick-em-up trucks 'round here would love to get 29 mpg / city.
Both my R65s, 1981 and 1983, get a bit over 40 mpg which is combined city, county roads and a bit of higher speed highways.
Also, when riding in town, I usually stay a gear lower than you might think. The alternator does a poor job charging the battery at low revs and city work. The lower gear and slightly higher rpms keeps the battery happy and does impact fuel mileage a bit.
I'd much rather spend an extra pint of fuel than have to push the rascal. I've long since quit checking mileage. In town, reserve will get me to a station. On road trips, I just flight plan for 40 mpg.