Frame too small?

Touring / audax bikes need to fit you well for long distances - I'd try the massive stem thing but keep looking for a biggie.. don't get attached! ;-)
Thorn are good bikes.

agreeing with this.
For a touring bike, its better to be to big than too small.

You want a nice lofty frame with long wheelbase so you can sit more upright than a racey bike, and cruise. You can try a longer & higher stem. But too me it looks like it wont be enough. travelling any distance, you will have a world of pain in your neck and hunched shoulders.

Thorns are indeed nice, if you want to persevere with the frame I would reccommend some french / moustache style handlebars.

like this:

Nitto Doves & Albatross seem to be the best ones available.