My thoughts, definitely before considering a new engine:

The .55AX should be more than enough power for the .46 Reactor. The .55 was designed to fit in .46 planes to give them more power. As others have mentioned, 2-strokes need more throttle (rpm) to hover a plane than 4-strokes with their increased throttle response and torque.
-I think 13x5 would give good vertical performance on that engine in that plane. I have a 12x8 in mine for aerobatics.
-I did notice in the GP video they are flying the 4-stroke .70, but the .55 should give you more power, just with more RPM.

I would try more nitro (15-20%) and less oil (18%).
-2% more oil means 2% less fuel.

I wonder if the problem lies in the engine tune. Hovering is probably the hardest thing on an engine - high power, no air flow, and demanding fuel vertically against gravity.
-Check the tuning of the idle valve; most people seem to try to attack tuning with only the HSN, but it is a 2-part system. You're getting hot and lacking power, sounds like fuel draw is an issue in vertical attitude.
-Run the engine on the ground. Advance to full power, drop to idle, and watch your RPM. They should stay constant for a good 20 seconds. If you see a gain in RPM, your idle valve is lean. If you see a decrease, your idle valve is rich. Adjusting one means you have to go and check the other; it is an iterative process.
-Check your fuel system for leaks. Close off the vent, disconnect the engine, and pressurize it over night (by mouth). Or if you want to do a more thorough check, pull the system from the plane, pressurize it, and dunk it in water to check for bubbles.

Check the balance of the plane in the air, not on the stand. The stand gets you close, all adjustments to be made by flying. Fly straight and level at 3/4 throttle, pull to 45 degrees, roll inverted and let off elevator. What happens? If you are concerned mostly with 3D, the plane should continue straight, or even gain a touch of altitude. "Neutral" will have a very slight decrease in altitude.
-Don't forget that balancing on the machine is without fuel, and if you're flying 10 min and landing with fuel in reserve, that's a bunch of extra weight in the nose.

Hope this helps. Good luck!