My current seat bag is a Wildcat Tiger with the Alpkit Tapered Airlock dry bag. I’ll use it with either (commonly) a standard post or occasionally with the Reverb, the only (potential) problem with the latter is that in muddy conditions there’s the possibility of grit getting between the post and bag strap and scoring the post. The Airlock is 13L in size though of course you don’t have to use all that volume, I did use an Exped Dry-bag before but it was slightly awkward to pack in to the tapered nose of the Tiger such that it didn’t work loose.The Airlock is heavier material but fits a lot better. My wife has the same setup but she’s shorter than me and there’s only a couple of centimetres between the bottom of the seat pack and the top of her rear wheel so there’s no way she’d be able to use a dropper anyway. The setup shown in Jam-bo’s photo has the bag sticking quite high and above the level of the saddle, my setup is closer to horizontal so doesn’t get in the way if you shift your bum back a bit.
If you have X litres of kit to carry then you need X litres of storage either on the bike, on your back or a combination. The only way to get round this is to take less kit or less voluminous kit.
The modern three bag (handlebar, frame and seat) setup has the advantage of centring weight on the bike since the heavy stuff usually goes in the frame bag. Most people seem to have their sleeping kit in the handlebar roll with just spare clothes in the seat pack. I don’t think I’ve had more than 2Kg in the seat pack even when it’s been full. I certainly don’t notice it, I’d rather have the kit there than on the handlebars TBH.
In addition to the standard three bags there are also the stem cells (https://www.alpkit.com/products/stem-cell) which sit behind the handlebars to either side of the top tube and the fuel pod (https://www.alpkit.com/products/fuel-pod-medium) type bags which sit on the top of the top tube. There are one or designs which extend the fuel pods to run the full length of the top tube but I’m not too convinced of their stability since the carried weight is above the fixing point. I’ve also seen a bag that fits in front of the down tube but I’ve not tried it though I suppose if your suspension doesn’t let your wheel get too close to the frame then it should work.