When I enter a tavern the screen glitches out and everything freezes for a few seconds until the game crashes. While this does allow me to exit the game, I was wondering if there's any way to fix it so that it works correctly? I am running Windows 7 32-bit.

After you exit the game, the client keeps running for a while doing whatever the client does, including saving your data file updates.
It should not crash.
Having said that, some windowing software like dwxnd do abnormally terminate for me.
I have not played around very much with the client to try to work out why.