FT.........I also found that I was suprised at how poor the signal to noise ratio was of my setup on Paltalk. Using the Paltalk audio test I felt that I had to have the Speaker voulume turned up very high........with consequent increase in background noise...........in order to hear my test recording...........or like you say...........I had to be very close to the mic.
All I can suggest is that you try out in one of the Paltalk rooms. There is an additional control when a room window is open for mic level (bottom left) which also has a level indicator. When I actually took the plunge and tried it out I was apparently comming through loud and clear to others...........without having to be within an inch of the mic!.........My fiddle and singing voice have also been picked up ok in Open Mikes Mudcat Session. If, like me you are used to recording situations or working with Microphones in a stage setting then I think its a case of adjusting to a different level of sound quality and getting quite close to the mic. It also aparently sounds much better to them than it does to us! Look forward to a chat sometime soon :-)