Noise issues in low light

[Georgeo]

I havn't noticed anyone else discuss noise issues with shots using the oly dslr's, so i thought i'd just ask the question since it is really starting to frustrate me. I've noticed that in the dark areas of my pics, mainly in low light situations, the is quite substantial noise - even when using very low ISO settings and slow shutter speeds. Refer to the below pic, shot at F16, 50sec, ISO 160, (E620 14-42mm kit lens) on a tripod using a remote) shot in raw then post processing using oly studio pro experimented with noise reduction, sharpening, etc (this pic has improved on the original raw file though, but still not good either). Then when cropped as you can see : still a lot of noise.

Am I doing something wrong here? wrong settings? I know that the smaller the sensor on the dslr's the more prone they are to noise, especially at high ISO levels but I didn't think it would be this bad - if this is normal for the four thirds system sensor i am seriously thinking of selling and getting out of the system and might consider a nikon.

I was considering spending some big dollars on the 12-60mm lens, would a better quality lens improve this kind of problem?