Coming from a DH background I feel that there's nothing wrong with a short stem, and this case is probably no exeption, if I had to try and put my finger on the handling problems from a photograph, and your decription, I'd say that probably the BB is too high and the head angle too steep while your on the bike…..how much sag are you running on the rear?
try dialling in 30% sag on the rear when you're sat on the bike, see how that changes the ride…..just an idea, but thats what I'd do first
edit…also get the sag right on the forks too, aim for 20-25% when you're stood on the pedals