If you want to stay mechanical in order of doing:
Upgrade pads to good after market
Upgrade cables to compressionless like Jagwire Mountain Pro. This is the best bang for your buck.
Upgrade Calipers to TRP Spyke with good aftermarket pads. They sell Spykes on Aliexpress for next to nothing, but the stock pads are pretty bad.
I'm at this level with my touring bike. It stops real fast, has good feel and didn't cost the earth. I ride like a loon, carry a heavy load and have 2.5" sticky road tires.
Upgrade discs to Icetech
If you regularly travel then cables are good because you can be brutal with them when boxing and unboxing your bike, one less thing to worry about..
If you want to go hydraulic then maybe get Icetech rotors. Whatever hydraulics you go, make sure they can take Icetech style pads with the cooling fins, they work good on my MTB.
I think the lowest grade Shimano that takes Icetech is the
https://bike.shimano.com/en-US/produ...0/BR-M615.html maybe replaced by these
https://www.universalcycles.com/shop...68&category=30