Lefty,
Depends where the contact is, if it is wheels in guards then yes smaller wheels will solve the problem.
If it is springs hitting the frame - (which is what is looks like based on one of your earlier photos) it is spring hangers, longer shackles or springs or all of the above. or don't load the trailer as much/ live with the bottoming.
If you don't have a welder and a drill press the only realistic DIY is purchased longer shackles and a couple of spanners- also the cheapest and easiest diy option.
I notice you are in Perth Martins trailer parts will have the shackels and will probably be able to make some custom longer ones if they don't have what you need.
In the absence of DIY it is of the to trailer repair place and pay the $