Naw, you just need to bend your elbows! Bend them a lot, keeping your elbows close to your body. If that makes your arms tired, do pushups. You could also post a photo of you on your bike. The pain in your upper back is from rounding your lower back. Roll your hips forward until your back is straight (look in a mirror) from the top of your shorts to your neck. That'll fix you right up.
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Your reach is correct if, while seated with your forearms and cranks horizontal, your elbows are just in front of your knees.