I definitely think it would be worthwhile trying a faster flow teat. My DS never went by the age guidelines on the teats, and was on the fastest flow by the age of 4 months. When he wanted his milk, he wanted it now, and did not want to work hard for it.
The only thing I can suggest is give it a try. They will not be a waste of money if he is not ready for them yet, as you will always be able to use them at a later stage.
When trying him with the faster flow nipple, I would hold him a little more upright than usual just until he gets used to the flow, and does not splutter. It may take him a few feeds to get used to the flow. If you find that more milk is flowing out of his mouth than going down his throat then you know he is not ready for them.
With regards to watering down the feeds at night, I would go by half, so if you are using 4oz water and 4 scoops, I would keep the 4oz water, and just put in 2 scoops and see how you get on.
I can see why your lo would not be hungry for his morning bottle with having a feed at 5:30am in the morning.
In order to get a few extra oz into your lo, you could also try a cluster feed at about 5pm, to see if your lo would take any more - you may have tried this though.
If it is the teat that was causing the problem, you will soon start to see results with your lo taking more milk in during the day.
When switching teats, I would make up a bigger bottle i.e. 7oz, and see how much your lo takes.
Hope this helps.
Let us know how you get on.
Paula