The problem with using a subwoofer's internal crossovers is that they are often an afterthought; an accomodation for consumers who lack a sub-out RCA jack or an AVR with built in crossovers. The quality can be poor, and remember, the entire audio band, not just the bass, will be run through this crossover.
I myself use a subwoofer for each of my left and right channels, and I would not want to be without them. However, I am planning on upgrading the outboard crossover my subs use for the reason I stated above.
Does the H-K AVR have a Treble level control? You could just nudge it a bit lower. That might be all you need, especially since you seem to like the sound with the exception of the too-hot treble.
And Plato has a good point. Consider some sound absorption at the first reflection points. Parts Express sells low-cost acoustic foam panels, if you don't mind the "studio look". Is your floor carpeted? If not, consider a rug for the space between you and the speakers. If you like the sound of headphones with your system, it may well be the room acoustics (or even the loudspeakers) that are the problem.