You may not realize this, but holding full up will actually slow down the takeoff run rather significantly. In addition, it creates a situation where the plane will takeoff before it has adequate flying speed, exposing it to an unexpected snap roll.

Since the plane sits with a nose high attitude, try leaving the elevator at neutral until the plane has developed enough speed to takeoff. Once it's at speed, you should be able to pop it off the runway with just a little up elevator.

This is the smallest recommended prop for this engine, so it should be in about the right range. If you want to allow the engine to spin a little more, you could try an 11x5. I don't think I would drop down into the 10 inch range, it would likely develop less thrust and therefore less acceleration on takeoff.

Slightly larger wheels could help it get through the grass better. Don't worry about it being nose down, that helps it stay on the ground when it lands. If you want to try raising the nose, just put a slightly larger wheel on the front. If you do raise the nose, do not make it any higher than level.

If the baffle can be removed, and then put back in, this would be worth a quick test. Remember that removing the baffle will reduce back pressure, which will reduce fuel pressure, which will lean the engine out a bit. To make sure that you're truly testing the effect of removing the baffle, instead of just leaning the engine a bit, set it a bit richer. Borrow a tachometer from someone so you can measure before and after.