It'll help by 7mm. Small frames with 700c wheels - there is just no way around it. It only is a problem when you are going slow.....you lean a bike, you don't turn a bike.
If you don't might me saying: You're doing something 'not right' - elongating cables to compensate for a saddlebag sounds like something you should not do.
Extra long cables cannot possibly be 'right' with shifting/braking. It may be ok going around the block, but.......
Sounds to me like you don't have the correct bag. 'Saddlebag' sounds like it's for (duh) the saddle or a rear pannier? Eight pounds up front or eighteen pounds total won't affect the frame what-so-ever. If you're concerned about trail/rake, etc., 'google' it - there are some pretty simple explanations. A simple to remember mantra: "the bigger the bike, the less the rake". A 43 rake on a 48cm frame - whew - that's more a rake for a 56/57/58ish size (head angles being 'normal').