First off,
Yes you can replace the fittings on the block.
Yes you can also use 3/8 ID hose over all your 1/2 fittings.
Here is your problem:
The water block is designed with a 3/8" channel and 3/8" fittings. THe rest of your system is 1/2". That means your entire system will be reduces to only the volume of water that can pass through the 3/8 channel that is in the water block.
In the end, you will end up with a 3/8" system even though everything else is 1/2". TRUE, it could be possible for the system to work slightly better than a 3/8" system because everything else is 1/2" but you still have the MOST restriction in the system being the smallest part, hence your problem.
Dont get me wrong, the block itself works fine (I am currently useing one myself
) however it was designed for a 3/8" not a 1/2"
IF someone can prove me wrong, please do.