Is there a pulley configuration that can both reduce distance and weight?
There are lots of ways to do this, but first and foremost, you should understand that counterweights on garage doors have gone out of fashion for safety as well as size/complexity reasons. Springs have almost entirely replaced them.
The classical approach to keeping the counterweights in stud bays is to divide and conquer. The counterweights do not need to be located in the space-restricted area right by the door - you can run cables all the way to back wall of the garage, or all along the side wall(s) and get multiple stud bays involved by using multiple cables to multiple counterweights.
When choosing components, especially cable, cable clamps and pulleys, consider what happens when a cable breaks, or becomes unclamped. This is not the place to choose the cheapest thing you can get. i.e. concrete-filled paint cans are perhaps a dubious choice for the counterweight itself, unless you embed a suitable anchor in the concrete - a paint can handle is not what you want to entrust with holding up a moving counterweight for some number of years.