Shortening the arms just gives it back it's sole, makes it not so big and sluggish, makes it fly faster, etc.
yaw wobble is form the small props and higher vk, could be connected to not being perfectly leveled motors. .1 degree is too far off, they really like being perfect. i bail that inner through bolt and align motors using the clamp style retainer on the inner mounts to allow custom tuning the motor level.... long props that almost touch are easier to level, you want to start with making the rear motors align to each other than align the front motor to each rear motor.... ie left rear to left front, right rear to right front
the 400 motors are nice, there all hogged out to be lighter = longer flight times. Built in prop adapters are really nice