more out of 5.9l 360 magnum

Does it have the Mopar M1 single plane intake on it? If so, ditch it for an Edelbrock Airgap. The M1 kills the midrange power while the Edelbrock will boost the midrange and make as much (or possibly more) power at high rpms. I personally experienced this with my old 360 magnum.

What carb is on it now? Still the 850 Demon? If so, it's far too big of a carb and again you're losing midrange and throttle response. Demon carbs are wet flowed so their advertised numbers are a little deceiving if you're not used to it. That carb is WAY bigger than it's Holley or Quick Fuel counterparts. IMO a Holley or Quick Fuel 750 would be just about perfect, but the Proform Street series 750 (I hear) is an excellent low budget carb.

Does it have headers? What type of exhaust does it have? Tube size? H-pipe or x-pipe? What mufflers?

To answer your question about the spacer, it's hard to tell since I don't know exactly why intake and carb you have yet. However, my personal experience with my old 360 magnum was that it like a 1" open spacer on top of the Edelbrock Airgap intake, but liked no spacer (open or 4 hole) when I ran the M1 single plane.

In case you're wondering, the reason I'm focusing on low-midrange is because generally it will make the car more fun to drive. You'll experience the benefits more often since that will be the rpm range you drive in most, instead of having to rev the crap outta your motor to ( maybe) feel a few for hp. Besides, that engine is pretty maxed out as it is with the heads that are on it (without work, of course), and your money is better spent on optimizing what you've got instead of trying to improve on a combo that may or not already be optimized.