I've never "oiled" a rosewood board in 30+ years of predominantly playing RW. No problems at all using a quick FastFret wipedown. Has always worked fine for me. Looks good, plays good.
That being said, if I were to start oiling, my first move would be trying whatever it is ElectGumbo does to...
I think a black guitar, as in JM above and Hendrix at Monterey, probably can sell a bit of a size illusion sometimes. Like the slimming effect in black clothing. Hendrix seems to dwarf that black/RW strat at Monterey compared to later on when he was playing maple.
Tall narrow or vintage frets seems like the most immediate "fix"if the having room problem is the primary objective.
If it were me, and taking into consideration you're moving away from metal tones, I'd bite the bullet and get the best guitar I could afford, that has the room I was looking...
That slopped COA would concern me. That mess can't be the original from Fender.
Where's EGumbo? He did a replacement COA through Fender, I believe. Did Fender fill out the replacement in crayons like this one?