Thanks Tever and J. M. Pescado. I have tried without Anach's mods and still the same. Other issues include whenever I switch households, whether the Awesome way or Edit Town way, inactive households loose their relationships. By this I mean husbands and wives are no longer husbands and wives. They don't even know each other despite living in the same household. Same thing for random people living together, they don't know each other. Luckily, the parent-to-child relationships stay the same and sibling-to-sibling stay the same. I think this may have something to do with the scriptcache.package file, although I've deleted it before numerous times without these issues, so that is the only thing I can think of to cause this, but again, I don't know.
Umm at this point, if your game is that borked, I'd try uninstalling it completely and reinstalling everything except Town Life (and don't patch the 1.26 or install Pets, it is pretty FUBAR). Once you have everything installed fresh without Town Life, try using AM by itself and see if you can recreate the problems. I am pretty sure you won't be able to recreate these issues in a fresh TownLife-less and 1.26-less install with ONLY AM. The problems you are talking about are not due to AM (I am 95% certain of that, based on what you are saying).
Assuming AM is not the culprit, I would go ahead and install Town Life at this point, put AM in, and try to bork the game again, with only AM running. If you can't, then google up Twallan's Overwatch mod, which helps immensely in keeping neighborhoods clean and clutterless. EA's engine is pretty shitty and as ususal it's up to the modding community to fix their shit for them since they can't be bothered (witness, TSR has today released a mass-fix for borked CC from the Pets patch).
If you refuse to do a totally fresh re-install of the entire game (or you have already done so), I'd go get Twallan's Overwatch anyway and see if that cleans the neighborhood for you enough for AM and the engine to run properly.