The D2 reading is not germain to much these days. So your other result is pretty good.

When using the topical magnesium liberally, you may not need the full dose of the oral. This would be very critical if your kidney functions are not normal. But the magnesium taurate is a good one because the taurine is also good for you.

It is your choice whether to use 1/2 dose of the mag oral or not.
I am glad you are seeing improvements with the lotion. Everyone here who has tried it likes it too. With time it may help correct some things and you won't need so much oral. If you stop the lotion you WILL need the oral however.

Melatonin is made in the brain from serotonin using methylB12..and you are taking a good dose of that.

Sleeping is difficult to address. I use l-theanine now at bedtime and it helps with GABA...and may help you taper off that Xanax more comfortably. I also take 3 mg of melatonin in a new combo product from Schiff called Melatonin Ultra (has some theanine in it too, but a small amount). I don't think the theanine would interact with other medications.
Here is a good resource and it says no interactions so far published:
http://www.drugs.com/npc/l-theanine.html
I think you could try it... it is supposed to help with PN too.

When I have major sleeping issues I use 50mg of Benadryl, but some males may not be able to use that because of prostate issues.(may cause urinary retention).

The magnesium should be helping with sleep too..esp if you apply one of your doses at night.

If your sleep problem is due to poor serotonin levels, consider l-tryptophan. It may help as well...but you cannot use it if you take any SSRIs or Cymbalta, or its cousins. As you decrease the Xanax you'll notice for a short time unpleasant side effects.
Theanine and tryptophan may help that.

Thanks for the update.