I'm not a suspension expert but in my experience of faffing about with settings, start aiming for about 20mm of sag when you're sat on it. And then ride it. If it's too Jarry on small ridges then maybe a little more sag. If it's ok on the flat but gets jarry/choppy on a bumpy road then go for a little less. If you just can't get it right adjusting only preload then start messing with rebound damping. Too much damping will mean the suspension won't re-extend fast enough and eventually gets too compressed and stiff. Too little and it'll bounce back up like Tigger and do a little jig when it gets to the top of it's travel. Once you've found your setting, then make sure the front and rear rebound at about the same rate. You'll need a Friend to help with this. You want compress suspension at both front and rear and see them both bounce back up at the same rate, not see the rear come back up faster than the front or vice versa. And that's a matter of tweaking and patience.
To put it another way, more preload will make the suspension want to extent faster after being compressed. If it extends too fast it'll bounce (do a little jig) at the top of travel because it overpowered the rebound damping, try increasing that. That will control the rate of rebound. But don't go too far else the suspension won't get chance to extend again between bumps eventually getting over compressed and it'll feel like a hardtail over a series of close together bumps.
One way or another, these bike aren't supposed to be sloppy soft cruisers so don't expect to be wafting along but you also don't have to expect to get off the thing 2 inches shorter than when you got on. Not sure if that helps any. Hope it does.