I like the look of those tires. Not so much how far in they are compared to the fender flares but looking from any other angle or even from farther away I don't think I'd even notice. As it sits right now you will have considerably less mud, or whatever you drive in, thrown up onto the body.
Wheel spacers just push the wheels out. I don't think they effect the ride. Some are good, some can cause problems, someone with experience can help you to get the right ones if you decide they are needed.
Honestly if I couldn't handle the current look I'd get thinner flares because I think the skinny tires if pushed out may look worse.