Hello Vince,
Yes, diffusion would be best for getting the speakers closer to the front wall, as you have found you don't want to absorb the higher frequencies which causes a tonal imbalance.
Regards placement, ideally they want to be well away from the front wall to delay the reflections, this is why diffusion helps you. Personally I've found speakers far apart but then actually listening quite close, almost between them, has given the best imagery and depth.