It sounds to me as if either your are too either lean on your slow jet/pilot jet wheter it be the wrong one, or damaged.
OR you have a vacumm/air leak. that is why you need the choke on to make it idle. Normally you will get that air leak at the base of the jug on the Z, the intake area, or around the vacumm fitting for the fuel pump pulse line or line itself.
You want to carefully spray some brake cleaner (It is flameable so make sure the engine is not too hot) around those areas and see if the idle changes. If it changes dramatically then repair the air leak.
Also you want to make sure that the vacumn line to the jug is not full of raw fuel from a ruptured fuel pump diaphragm.
The 85 Z was jetted slightly rich from the factory. In my experience with a stock carb rarely do you have to run a larger main jet.
Make sure all jets are the correct ones per service manual, put your needle back to stock posistion, then test for air leaks.
Here is where my long useless list of stuff nobody cares about should go...
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