Recently, I have been told by a few employers around China that I should not convert my Residency Permit to L visa as their city/province did not do the conversions.

That's true, but the PSB office of the place where your Chinese wife's huko was issued are obliged to do so. go there with her, as it's likely the visa clerk's English is not up to much. Your wife can communicate with him/her in Chinese re your visa conversion. You can appoint her as your agent! It'll be a process that involves much running around - to 2 police stations as well as back and forth to the Waiban. Go ther first to get the 2 forms, one for visa application, and the other re your accommodation while you'll be visiting your 'Chinese national relative'. Try not to lose your temper during the process!