How large is your pot?? I primarily use a 32 quart kettle for my boils, which is plenty for either my mash or sparge volumes. I've also used a 20 qt pot for the sparge volumes (when using the BIAB method) without issue. If you can't hold at least one of the volumes, then I would get a larger pot to use. 32 quarts is a good size for most 5 gallon batches, especially if you have a cooler/MLT. If you can get a larger pot, it wouldn't be a bad idea, but I wouldn't go above 40 quarts for 5 gallon batches. I have a brew buddy that has a 30 quart pot that he's used with success, but it can be tight for full boils, getting foam-over when using the propane burner. Some fermcap can help there though.
If you do use less water, you might not get as good a mash/sparge results, meaning you won't be using most of the grains potential. I would want to extract as much as possible from the grain for any all grain, or even partial mash, batches.
You might want to think about just doing smaller batch sizes. No reason you can't brew up 4 gallons instead of 5. You could easily ferment in a 5 gallon carboy that way.