How can I move the handlebars on a mountain bike close to the rider without affecting handling and control? I recently finished building up a mountain bike, with the help of a friend. My initial rides - a few miles, nothing too extensive yet - revealed that I need to move the handlebars a bit up and back towards the saddle to make my elbows happy; I prefer them to be bent more than they are now. I can think of two ways to do this: Raise the bars or bring them closer in, or a bit of both. (The stem is already at the top of the fork steerer tube, and I'd prefer not to get an extender on this bike.)

Background

The drivetrain is a Shimano mountain set I pulled off a hardtail 80's steel-frame mountain bike (upgraded in the noughties), hung on a hardtail 90's Specialized Stumpjumper frame (an aluminum frame with slightly more aggressive geometry). Neither bike had any suspension at all, including the front fork. (Due to my preferences. Suspension is nice, but I dislike the slight loss of feedback.) 

I'd like to know what these changes are likely to do, and, possibly even more importantly, why this is the case. 

Option 1: Get a smaller stem

This is an easy one, as the existing stem is quite long. Whatever I do, I'll want to bring the bars in. However, I could also look for a stem with a steeper angle while I'm at it. How will these changes affect how the bike handles? Will a shorter stem make the bike more twitchy, or less? (I quite like the way it feels right now.) 

Option 2: Get some riser bars

This is a fairly simple way to get the bars closer to me. Rotating the bars one way or another will give me more options. However, I quite like the existing flat bar, as the simplicity of it is appealing from an aesthetic standpoint. Will riser bars affect the feel and handling of the bike? 

Summary

I have two possibilities, and (I'm guessing) combining both approaches will likely be what I end up doing. Before I start ordering parts, which of these is likely to give me the correct reach while preserving the feel of the bike as it is now, and why? Are there options that I haven't thought of?
Moving your bars is probably going to move your centre of gravity which is likely to affect the handling of the bike. That said if the only change is that your elbows are more bent it might not make a big difference.

A shorter stem will move your weight backwards that means:


The bike will be more stable and less twitchy.
It will be easier to move your weight back when descending. It will also increase your range of movement, giving you more control (as long as you use it!).
You will be in a less powerful position for pedaling.
The front is more likely to unweight and rise when going uphill. 


If you're fitting a shorter stem you'll want to lift the bars up as well, you can do this by fitting a stem which is angled, or riser bars, or both. This is all about what feels good so you'll want to experiment a bit - long/low and short/high both feel good, long/high and short/long don't.

The other thing you can do to get yourself closer to the bars is to move your saddle forwards - the saddle can move forwards or backwards on the clamp, and you could possibly use a seatpost with less/no layback.