R2 is supposed to designate what output bin the LED was sorted into. R2 is pretty high up in their offerings, you can see what bins the XP-E is offered in on the datasheet (
http://www.cree.com/products/pdf/XLampXP-E.pdf).
LEDs do weird things without domes. One of mine turned greenish gray.
The LED dome is there to aid extraction of light and to protect the LED die. Any damage to the dome causes inefficiency in the optical path. Think about how if you shine a light at a piece of glass, directly at it, most of the light goes through, but when you shine it at a sharp angle, more light reflects off of the glass instead of going through. The dome ensures that most of the light that escapes from the phosphor is able to make it out instead of being reflected back and wasted.
It will still work just fine with lenses and reflectors, but the beam will just not be as smooth, since most likely there is still a few, uneven pieces of silicone dome on top of the die. An aspheric lens will take an image at its focal point and throw that image downrange. If you put the LED at the focal point of the lens, it will project the picture of that LED downrange. If the LED looks funny, or doesn't have a dome, the lens will still project an image downrange, of a funny looking LED.
With your reflector that makes a doughnut, try moving the LED further into the reflector. You want the image of the little yellow die to be right where the arc was sitting originally. Although, I'd recommend just getting another HID bulb. They make relatively cheap "55W" automotive kits. Usually only about 40-45W output on the ballast, but higher than 35W.
