Yes, exercise is often a good way to lower BG levels. However, sometimes the stress of exercise increases BG levels so be sure to monitor this. Drinking water helps because when sugar levels are particularly high the kidneys start to filter glucose into the urine, and extra water helps.
My advice with regards to diet change is to make a significant cut to carbs, stick it out for at least a week, and avoid sweeteners and intensely satisfying foods. Our brains and bodies take a while to adjust their expectations, but it does happen. After a while without those rushes of carbs or sweetness or other "flavour hits", you will find that you actually feel quite satisfied with a simple, low-carb meal.
Unfortunately I am noticing a trend with restaurants and food outlets making their food more satisfying and addictive. Even if it's low in carbs and fat it will create hunger and cravings later. If you start paying attention and avoid this kind of food you should find it easier to maintain a healthy diet.