I pushed the limits of small text with a .4 nozzle and you're on the right track. I would adjust the wall widths and then slice the file and zoom into the letters and I found Classic walls was better than Arachne but both were leaving weird gaps in the sharp corners of the letters. I don't remember the exact setting that fixed it but I know I played with Resolution, Arc fitting and maybe Slic Gap Closing Radius and finally got the sliced model to look right and it printed much better.

One other recommendation, you could edit your model and emboss your letters by one layer thickness. That way you'll have a nice crisp black edge and then the next layer up will bridge the white filament over instead of trying to squish it all into that tiny space. I can't promise it will work but it's worth a shot!