Yes, you can increase power density with sufficiently neat plasma physics.
But no, the fundamental limit on power density in DT fusion doesn't come from plasma physics, it comes from engineering (specifically, limits on power/area on the first wall, coupled with minimum reactor size set by the cross section of neutrons w. blanket materials). You might have a sufficiently sucky design that can't even reach that limit, but once you reach it all the improvement in plasma physics or magnetic fields you can imagine doesn't help.