A single lesson with a good instructor would get you on the right track. You're already doing one of the best exercises out there to improve your jumping position, just not applying it to it's best extent. I just rode this same exercise last week at my quarterly lesson as I like to call it. She had me tuned up in no time.
As for your release, use a neck strap or something about 1/3 of the way up your horse's neck. Keep your hands there along side your horse's neck being careful to keep following your horse's head. When you get to the fence, the simple act of folding at your hips to go over the fence will provide the adequate release over these small fences. As the fences get bigger, so does the fold at the hips, so the release is proportionate.
You just have to see your distance...you don't have to like it.