Your welder doesn't have the power for .035 wire. Get back down, to.030 which I think is the smallest, get a good wire capable of doing multiple pass, new tips (good ones), and yeah, slow the speed of wire down, heat up. But personally, I would open the bevel up a little past 90, and do multiple pass. With the cut inside, that would be my choice. Unless you grind and put a cover pipe over... That is an option as well.
