If engines are closer to the wing (or in the wing) does it increase efficiency
Yes, mounting jet engines in the wing root increases aerodynamic efficiency due to:


No drag from engine pods
Smaller yawing moment upon engine fail, and resulting smaller vertical tail.


But that is about it. There is a host of disadvantages to mounting the engines in the wing root, one of them being that high lift devices cannot be used and the wing is bigger, causing more drag. 

Three huge advantages of mounting the engines in pods, underneath the wing, in front of the aeroelasitc axes are:


High bypass engines can be mounted, vastly improving fuel efficiency.
The engines are within easy reach for maintenance.
The weight of the engines provides both bending relief, and reduces structural weight to prevent flutter.


Also see this question.