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We do have plans to improve diffing, and have wanted to do this for a while. There are cases where the current algorithm works better, and cases where other algorithms work better, and the plan is to weigh a default based on the file type but to also attempt a couple different algorithms and analyze them to determine the best one. There's a lot of work required to get there. Won't happen for 4.0, but maybe 5.0.
Would you be able to send a publicly-viewable source file and a diff that reproduces the issue?
Fixed on release-3.0.x (4c314f2185093125fcf75778f07e3845ab4b9280). Scheduled for 3.0.15.
Was this back ported to 2.5 by any chance?
Unfortunately there's not really anything we can do about this. Those e-mails are created by the Django framework.