Is the Recirc mode on the standard HVAC system in 1997 supposed to use 100% interior air only? When I use Recirc I still get blasts of exhaust from other cars. I have confirmed that the recirc door opens. I can see it open so I know it is using recirculated air when I look behind the heat vents on the floor. However, outside smells (exhaust, skunk, etc) still get in.

Odors can sneak by old gaskets and seals. If the vent'* are working correctly, start checking to see what the condition of the outside air vents gaskets are.