I don't think it makes very sense for Milan to sign Modric. He is soon becoming 40 years old. How much can he contribute to the team? I respect his career very much but I think it is time for him to think of retirement.
I mean he can't play full time. Probably Milan wanted to benefit from his experience by subbing him in later in a match. I don't expect him to be a regular starter.
Because his match condition wouldn't be convincing to play effective for 90 minutes.

The reason AC Milan acquired Luka Modric is strictly related to merchandise sales.
A big name like his generates a lot of sales and huge revenues. Let's say it's a good deal for AC Milan financially. I agree with you, he's getting on in years and most likely won't be able to play all the time, but he'll get his chances.