I know its only a picture, but there looks like some room for height adjustment to me, and don't forget that lowering springs are normally made stiffer too so you'll have less body roll bringing the arches down to the wheels/tyres compared to normal anyway.
Having the arches inner profile lip "rolled" is an excellent suggestion, and is best done with the correct tool and results in a clean paintless modification if done properly and there are no other issues to take into consideration.
I managed a complete inside roll up and even achieved around a 10/12mm flare on my 33 arches without requiring any paintwork rectification, just the right tools and patience.
That was to squeeze 17" x 9j wheels into a piddly little 33 wing and arch, so i reckon yours should be easy!
