UTD didn't dwarf many clubs. They had to contend with Blackburn Rovers spending big, Newcastle spending big, Arsenal and the Wenger era, Jose and Chelsea, Man City's oil slick, Liverpool with Benitez and SAF overcome it all. This whole narative that the league wasn't competitive back then is a load of junk. He constantly rebuilt teams whilst they were at the top, not wait till his midfield were buggered.
Liverpool spent absolutely wisely in their top seasons. Their signings of the past 4-5 windows have left a lot to be desired. The midfield has had zero investment for what 5 years?
Since the 18/19 window Liverpool have brought in Jota, Thiago, Konate, Diaz, Nunez and Gakpo who have been the "expensive signings".
None of the forward players have been as good or better than Mane and Bobby were in their prime so essentially you have a weaker forward line, Konate is not really any improvement over Matip and Gomez. VVD is a shadow of his former self after getting injured too. Thiago is good but he struggles to keep fit and is now 30+, the rest of the midfield are just getting too old now.
I don't think it will take Klopp that long to rebuild. Focus in the summer on the midfield and look for a replacement for VVD. Their forward line is young, hungry and strong I think it is just because how weak their midfield is that everyone else around is struggling. (Wing backs and forward players). I actually think a season without Europe will do wonders for the teams physical state too. Just look at Arsenal now it has done them the world of good having a good rest last season.