Is it possible to increase projectile speed (bolts and arrows) without flattening the trajectory too much? (i.e. have them move in the default arch, but at a higher speed). Otherwise the crosshair won't be synchronised with where the projectiles actually hit.

since arrows and bolts are projectiles i would guess you have to tweak the settings for the given arrow/bolt you want to change
http://www.creationkit.com/Projectile
Could also duplicate and rebuild one of the other projectiles in the game and se how that can be tweaked.

You can modify the gravity parameter by the same multiple as your modified speed. Should work.