Not sure about the proper setting, since I get my grains crushed at purchase. However, my efficiency improved nearly 5 points when I switched to a new LHBS, and that was the only difference in my brewday, so I know it's related to his mill. My typical efficiency is in the 78% range, although I recently hit 83% on a saison. Here's my technique and equipment:
MLT is a 54qt Coleman cooler, I built this
copper manifold, I use 1.25qt/lb in just about all my beers, once I shut the cooler lid I don't open it again until it's time to vorlauf (i.e., I only stir once,) first runoff rate is kinda slow, I sparge at the same temps as you, sometimes will double sparge, and my second runoff rate starts slow but then I usually get impatient and throttle up.
Not sure if any of that is helpful, but it's been working for me, so maybe there's a trick in there that will help you.