My Planet Bike fenders have about 1" clearance between the wheel and fender on the rear fender, and a little less than 1" of clearance on the front fender. I would bring in my rear fender closer, but it won't go any closer without significant work. It looks good enough as is, and I like having the front fender close to the wheel so it catches more water spray from the wheel.

Is there any chance you can post a picture of the rear fender area to help in diagnosis?