I agree w/the banding, as well as doing twists, braids, bantu knots...anything that will help keep your hair stretched until its dry. We all know shrinkage is just a part of being natural but you can do things to elongate your hair.
As far as the dryness, I say start DT. You said you don't do it at all and while everything/every reggie doesn't work for everyone it is key to have a good moisture and protein balance and it doesn't see like your hair is getting much of either. DT & PT don't have to be complicated or expensive. I personally DT each week w/coconut oil over night & my hair has shown me much love since doing it.
So I would say to definitely start doing regular DT and in about a month or less you should start seeing results.