Yes, unlock your knees slightly. In order to keep your back flat you need to rotate more around your hips (unlocking your knees will help with this). Flexibility will come with time if you're a bit stiff in that area right now.
No need to stand on a block. You will get plenty of stretch just standing on the floor plus you will find it easier to keep your back flat.
Once you get the form right don't be scared to up the poundages. It's surprising how heavy you can go BUT always keep good form and a steady cadence throughout the exercise. No bouncing the weights off the floor.