I've tried defragmenting them but, with the nature of the data transferring, it just fails (or crashes the server.... ).
Can you expand on that? I built the first versions of MyDefrag because I had a need for an automatic defragger for servers. In other words, MyDefrag is specifically designed to be used on fully operational machines, i.e. servers. It should not "fail" or "crash the server". If you have a problem then see the I have a problem!
page for instructions on how to make a debug logfile.
Is there any way to utilise the "Flash Memory Disk" option to just defragment the free space in the hope the files will become less fragmented?
You could make a change to the FlashMemoryDisk script as Darlis has pointed out. But I doubt very much that your problem will go away if you do that, whatever problem you are having.