Dan,
> Should I use one inch 703 or one inch 705 for mid/high frequency ambiance control? <
I doubt it matters even a little.
> Should I flush mount it to the side wall or space it off the side wall 3/4 inch? <
A space merely extends the absorption to a lower frequency. So it can only help overall, but won't make much difference for the early reflections aspect.
> Is there a particular type of polyester I should look for? <
Yes, something that's not polyester! 
Look for burlap, or any soft open weave fabric.
--Ethan
