In Portland, OR, the light rail does 'train bunching', with the exact same consequences (inconsistent schedule, overcrowded trains followed closely by empty ones, etc).
The fix is to prioritize trains over all other street traffic, especially cars. (I suppose you could do this with buses, too, but people don't really see it that way because they have rubber wheels just like cars...)
In Seattle (where I lived for three years, until just recently,) there was this dedicated bus lane. Cars for the most part stayed off of it, but the bus still had to stop at traffic lights.
Anything on rail is just way more suited to nonstop use! People in cars can (or should) more easily understand that trains/streetcars can't just start and stop just for them.
Dedicated lanes and roads help, but light rail is significantly faster than buses & more reliable. It is a huge reason why we're investing in building Light Rail out to the outer reaches of Seattle.
With Light Rail, you are essentially buying people part of their lives back in the form of a shorter commute. That is quite important, as time spent driving in traffic is pretty well wasted.
In many places it is, but downtown it is right there on the street sharing lanes with cars. I've been on the light rail when it was hit by a car, and when it hit a car (both low-speed, but still delayed things by quite a long time)