yes, you can be too close. can you identify where various sources are placed (left to right) in the soundfield? does something 1/2 way between left and center actually sound like it's there? in too close and your phantom center will disappear--things like vocals will sound like it's coming from hard left and hard right, but not in the center.
ya dig?
as for whether an upgrade will help you, only you can tell that for yourself--get some of the "options" in and give em a test drive.
personally, i run a set of event asp8's and i think they're wonderful. they were an immense upgrade over my m-audio sp5b's, but then again, they oughta be, considering the $$ difference.
the asp8's, though, are more mid-field monitors than near-fields. they have a very wide sweet spot--i wouldn't place em any closer than 4ft apart (and be any closer than 4ft to em)--closer than that and the L/R image collapses.
cheers,
wade