Just for balancing purposes, move the Rx battery next the Rx, and the big batteries up against the 'wall' and see how it works.

My Rx packs are right next to my Rx (touching) and I've never had any issues. You can move the power box (regulator?) back there as well, when I was running 10S my regs were back behind the canopy where the rx tray is.

If you only have one battery, using an extension is adding a failure point. I don't think I would do it there, but some would.

What motor/prop are you running? And what spinner? (Stock is white w/ aluminum back plate)

I tried using different batteries to save weight/optimize performance, however all I really did was add complexity as they all need to be in different places to achieve constant balance point. Based on that, I don't suggest trying smaller batteries, unless you want to buy a few sets to use for serious practice and contests, and save the set you have for warming up or other purposes. But you can probably get away with 4000-4400mah if you wanted to. And 20C is all you need for power packs, don't waste money and weight on higher 'C' packs.