Light has certain properties, two of which are intensity and 'quality'. Intensity is controlled by the FEC...if you turn it up, it gives you more light...it's more intense. If you turn it down, it's less intense.
The quality refers to it's softness on the subject. This is controlled by the size of the source and the distance to the subject. A diffuser should increase the size of the light source, thus making it softer.
A diffuser will also eat some of the light...but because your flash uses E-TTL auto flash metering, the camera will just tell the flash to use more power to make up for the loss from the diffuser. So you may want to do both....use the diffuser and turn the compensation up or down.
Also, the E-TTL system relies on the reflection of the preflash to determine it's power. So if you are shooting a subject dressed in white, you will get different results than if you are shooting a subject dressed in black etc. Don't be afraid to adjust your FEC as needed.
My suggestion is to glue the built-in flash down and never use it

Get a flash that can tilt & swivel, so that you can use bounce flash.