The relief valve to the rear of the filter controls system oil pressure. The filter is partial flow only and the oil flows through the element and through a restriction hole of about 1/16 inch and the filtered oil is dumped directly back into the crank case.
As to the oil useage, how many miles does it get per quart used? Does it oil foul spark plugs? Does it leak oil from the front or rear mail seals, leaky pan gasket, leaky valve cover gaskets or leak around the filter can? Oil puddle under the car over night? The old style rope seals that these engines used are notorious leakers even in the best of times. Some older rebuilder / rering jobs used cast iron compression and oil rings and these did not last as long as the chrome rings or later moly rings that are used now and if so, 78,000 miles might have worn them out.
Is there much blowby coming out of the oil filler tube or road draft tube?