A compressed load is usually more accurate simply because it has a more uniform burn rate.
Think of a gallon milk container, half full of milk, as similar to your brass cartridge half full of powder only.
Now turn that gallon of milk on its side, like your cartridge is, when loaded in your gun. All that space above the milk is similar to the area that can be exposed to flame from the primer in your round, that is wasted and not burning powder, or just burning the surface of the powder below it.
Old competition shooters that used lighter loads, used to load things like sawdust, oatmeal, cardboard, etc... to fill the space so the powder on the bottom was evenly distributed around the primer even when the case was on its side.
I load 3.5gr Unique (flake powder) in 9mm when loading 147gr STHP's. Those are long bullets so it still is a compressed load, same as when I load 5.5gr of Unique when loading 115gr Winchester 9mm bullets.
As far as the bulge you are describing, I get that too in my 9mm. When I load rifle brass, the deprimer rod has a "ball" on it, that resizes the mouth/neck of the cartridge both going in and coming out, while depriming/resizing. 9mm does not do this, instead, it sizes the case, then you have a seperate die to bell the mouth to accept a bullet. Minimal belling is best, just enough to accept this bullet. If the bullet just barely sits in the mouth, when you force it down below that with the seating die, the brass is stretched slightly to accomodate the bullet, and you can tell where the base of the bullet is in the brass sometimes.
If you had a cannelured bullet, you would crimp the mouth of the case into the cannelure. I do not load cannelured bullets, but I use the lee factory crimp die that came with my Lee 4-die set (sizer, expander, seater, and crimp). You can crimp the bullet just using the seater but that is for cannelures.
Use the factory crimp die, and if you do not have one, buy a LEE FACTORY CRIMP DIE for the caliber you are loading.
As for brass shavings, I have had those too, using Redding competition seating dies in 223, but ONLY when using Federal brass. You can change up your brass and see if this fixes the problem, or you can chamfer/debur your cases prior to sizing, and again prior to seating the bullet. If you do this two-step debur/chamfer, you tend to cull more brass, because you cannot chamfer/debur brass that has deformed mouths, due to the out of roundness resulting in uneven wear on the mouth and shaving more brass on one side, and none on the other.
Hope this helps.