Tunnel magnetoresistance (TMR) sensors have emerged as a leading technology in high-performance magnetic sensing due to their high sensitivity, low power consumption, and miniaturization. In order to meet the everchanging demands of cutting-edge applications such as biomagnetic imaging and smart grid monitoring, continuous performance enhancement is crucial. This paper systematically reviews the key strategies for optimizing TMR sensors, focusing on thin-film material engineering and sensitive microstructure design. Material advancements are dissected along two paths: developing high-sensitivity systems via MgO barriers and composite free layers, and creating wide-linear-range systems through anisotropy engineering, including both perpendicular (PMA) and in-plane (IMA) configurations, as well as dynamic methods such as electric-field and strain modulation. Structurally, we highlight innovations such as vortex-state magnetic tunnel junctions (MTJs) and magnetic flux concentrators to enhance linearity and sensitivity, as well as advanced noise modulation techniques that effectively suppress low-frequency 1/f noise. The practical effect of these optimizations is reflected in the fact that TMR sensors can now measure magnetocardiograms (MCG) outside shielded environments and provide high-accuracy current sensing in smart grids. The future development is directed toward novel material systems that pursue either enhanced sensitivity or an extented linear range, the realization of monolithic three-axis vector sensors, and the deep integration of TMR technology with artificial intelligence for smart sensing systems. This work provides a comprehensive reference for advancing TMR sensor technology and its applications in high-precision magnetic field detection.