I can only answer the second half about guidance systems from a controls system approach. Turbulence is movement through the air and constitutes a disturbance to the system. It's like trying to walk in a straight line when the ground is moving. Any control system can mitigate the impact of the changes by noticing a deviation from the desired attitude or path and correcting, but it can't do so until the deviation occurs. Perfect tracking always requires seeing the future (a non-causal controller, in technical terms) to tell how you're going to have to adjust to stay 100% on course.
If you can't track the target perfectly, you could do a decent job of compensating for errors, also called "disturbance rejection" in control system theory. The biggest issue here is that the disturbances are very big, enough to knock airplanes hundreds of feet off path in a matter of seconds. We can always reduce the maximum deviation from course by making the controller more aggressive, but we run into the limitations of control systems very quickly:
- there are physical limits to the system like mechanical reaction time and corrective force available
- the more aggressive a controller is, the difficult it is for it not to be unstable and go out of the desired bounds under certain conditions
- more aggressive controllers traditionally have increased overcorrection (overshoot) and bouncing back and forth (ringing).
In summary, you'll never achieve perfect tracking without seeing the future, but you can reduce the amount of bumps from turbulence with a very well designed and very aggressive control system. In my opinion 3-7 m tracking would be very difficult in turbulence. Typical modern auto pilots barely achieve 50 m tracking of altitude in turbulent conditions in my experience.