The bike shop should have a collection of shorter stems for you to try. Sometimes raising the bars can help as well. Let the pros dial you in. Might take a hour and few test rides.
Crane Creek/Tektro make a smaller set of brake levers that I love. Crane Creek model---The BLR28 (SCR-5C) Compact. There is a Tektro branded model that's not as highly finished and is cheaper, but it's basicly the same. These levers are made for samller hands.
You can use the shim method-- it works great, but I like the smaller levers for a better all around fit.