I'm still deciding on which kayak kit to get and, have a few questions regarding the ones that CLC Boats offers.

I'm 5'6" ............
In testing the Shearwater, I liked the quick feel but, while paddling, I had to actively work to keep my paddle from hitting the sides of the boat. The cockpit did not really seem right for me, as the knee pads were farther forward than they should've been for someone my height.

This is a very common problem with almost all the kayaks I see - both kits, kayak plans, and commercial boats. Most kayaks seem to be designed for strapping 6-footers.
You've pinpointed the two main problems:
1)the 'thigh pads' tend to fall on the knees (or worse, not make good contact at all) when shorter paddlers are trying to use the boat
2)the cockpits are too 'deep' for folks with a shorter torso, so your paddling stroke is affected. ("It feels like I'm paddling the bathtub", in one paddler's words.)

Adding 'thigh hooks' can help with the first problem. With a boat built 'from scratch', the cockpit can be shifted aft - keeping the seat in the same position - which can help a bit.

The boat was a little tippy from side to side while I paddled

I don't recall if you mentioned your paddling experience. In general, I'd rather pick a boat that feels a bit on the tippy side vs. one that feels 'very stable'. However you may be correct about a bit of anxiety affecting your paddle stroke, though I would tend to blame that on the cockpit depth, boat width and deck shape.

It's essentially the same length, width and weight as the 16LT model but, with a taller deck, allowing for more cargo space (and more knee room for taller paddlers).

I'd try to get the lowest volume boat you'll be happy with for day paddles and short trips. When you plan longer trips, you may need to think about an 'expedition' or HV boat. A bigger boat with a smaller paddler on a windy choppy day is a recipe for misery, IMO.

I'd recommend you look at the S&G kit version of Bjorn Thomasson's Frej:
http://watercraft.clearstreamwood.com/wp-content/uploads/2016/03/Frej-SG-SH1-Lines-A2-Full.jpg

Contact: 603 449 2654 INFO@CLEARSTREAMWATERCRAFT.COM

The website was down when I checked just now, but Dan Caouette (ClearStream owner) posts here and can provide more info.
I paddle a strip Frej and it's a great boat, IMO. Nice low cockpit, great handling, and surprisingly quick.