re. Separate solvers in Dynamics – nothing can be done that I know about Solvers weren’t meant to do that. Dynamics is older and while it does simple things well it’s not real fancy. There are other collision engines out there – SilverBullet (and something else I can’t remember right now, someone?) they are plugins not free but probably can handle it (never used them myself) ….and 11.5 has Mograph Dynamics now, don’t have 11.5 yet and don’t know if it could do it but maybe.
re Clothhilde – the more complex an object the more it’s going to flex even if very stiff, a couple of things are possible – try maxing Flexion (in spite of it’s name it’s a form of stiffness) that might help (but not too likely)
– you could wrap an invisible proxy object (a simple cube(rectangle)) around each letter, make the letter be the child of the proxy but the Cloth tag on the proxy. It it fits tightly the collisions would look fairly good, of course if you need very realistic collisions it might not be accurate enough.