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Are there any time tested ways to improve one's bike handling skills?
Outside of regular riding (road) are there certain exercises one can do to increase body awareness on the bike, improve coordination, and increase balance?
Are there any exercises one can do off of a bike to increase handling skills and balance while on the bike?
In rapidly descending order of importance ...
(see Why I chose these priorities below)
Practice track stands. See How to do a track stand?
This teaches balance and slow bike handling skills. Also practice riding in confined spaces (the last time I fell off was trying to do a U turn on a path that was 4 ft (1.2m) wide :-)
Learn to jump both wheels off the ground at the same time. This is usually called a Bunny Hop. Apply to jumping objects.
You probably already do simple bunny hops to get up kerbs. See our bunny hop database https://bicycles.stackexchange.com/search?q=bunny+hop
Learn to pick objects up from the ground with your hands (on both sides).
Have you or a friend ever dropped something on the road and had to circle back, stop, and pick it up? With this skill you learn to control the bike while hanging off the side, with your knuckles dragging ...
Start by placing a drink bottle on some level ground, and ride slowly past it and pick it up with one hand. When you can do it with one hand, use the other. Then go for smaller objects. Last week I picked a pump a guy ahead of me in the bunch had dropped. Be very careful with long objects; if they get in your spokes you'll never even know what happened :-)
Learn to mono. Ok, so I still haven't grown up.
Learn stoppies (mono on front wheel). Just how much can your front brakes cope with?
The first two have obvious utility, the third is useful (but 99.9% of cyclists live without it) and the last two are more for fun. But they will all teach you balance and control.
But probably number zero should be learn to ride with no hands. Of course, this is illegal to do on the road, and of course every kid does it. Once you can do it well, you can put on and take off jerseys, rain tops, etc. Being winter here now, this one gets used every week.
After a bit more thought, I would add a couple of easy skills that teach a lot
Learn to initiate a turn using only your body weight. Most people turn by countersteering a tiny amount to initiate the turn. This skill teaches you how the geometry of your bike works, and links in with balance skills.
Practice riding along the painted road lines and see how far you do it. The further you can go the more balanced and fine tuned you are.
And seeing the answer by dlu reminded me to add
Items 1 to 5 are ordered as a combination of potential frequency of use and difficulty / danger involved in learning. Certainly @mattnz is correct that stoppies are valuable in emergencies (being able to do one saved me from a HUGE T-bone once).
Off the bike many forms of exercise will help. Yoga and martial arts in particular will help with balance.
On the bike consider mountain biking to help your road technique. A mountain bike with no shocks even better. Once you learn to negotiate rocks, roots, and drop offs then a lot of the low speed stuff that happens on the street seems easy.
Cyclocoss is a great way to improve your handling skills. You get to fall at lower speed on grass. They have clinics.
If not a mountain bike but the style of road bike. A racing bike with narrow tires is not going to be as agile or forgiving as a more upright position with larger tires.
As you are learning new street technique like hoping a curb it is easier to start on a mountain bike (I think). It is easier to bail on mountain bike (I think). Set up some cones to weave in and out of. See how tight of a circle you can ride. Empty parking garages are a good place to practice. Ride over (and hop) the those cement blocks to stop the tire. See if you can ride the length of the barrier. See if you can bounce the front wheel off a wall turn around. Track stands are easier to learn on a slight incline. You can practice your downhill with a lot of turns.
Ride off-road. Riding a road bike on dirt is a great way to improve your skills. Get out on dirt roads or mild MTB trails (just be mindful that large rocks or tree roots can cause a flat or even a dented rim if you're not careful) Bonus points: you get some great looks when you pass people on full suspension MTBs! ;)
One thing that can help is training on rollers. It's kind of dangerous at the begining, because the bike reacts a lot to little imbalances, but as you get more experience on them you will feel much more stable on the bike and this might help in feeling the bike better on the road.
As for bike handling, ride it and ride it more, I don't think anything beats experience. You can look up techniques for cornering or decending, but you will have to try them a little faster each time to know your limit.
I'm far from an expert here, but here are somethings that have helped me:
Pay attention to how you feel on the bike and how the bike responds to you. Some of this you are probably doing naturally – like shifting your weight back as you brake.
Read about cycling technique.
Encourage yourself to think about and experiment with the dynamics of the bike – for example, how does the balance of weight shift between your front and back wheels as you go from sitting to standing? How might that affect the bike's handling?
Listen to riders talk (or write) about the skills that seem important to them.
Notice how people explain their crashes and near crashes. Listen for what they did wrong or wish they'd known – you may have to infer the skills, but it will teach you a lot.
Don't neglect your core and upper body. If your core is weak, your ability to balance, lift, and jump the bike will also be weak.
I can recommend a very good book on mastering mtb skills (some transferable to any other kind of bike of course). Brian Lopes, Lee McCormack - Mastering mountain bike skills. I especially like the chapter on cornering. Plus you can start learning bike trials. Like mentioned before, start from track stand or cradle, then learn pivots on front and back wheel. Those can be done on almost any bike.
Standing on a swissball is also a great exercise for improved balance.
I want to say one word to you. Just one word.
Rollers.
Riding off road will help too, but learning to ride rollers comfortably will take your balance to another level and greatly enhance your ability to recover from the unexpected: blowouts, sand, getting bumped.
