I don't think the R-11 on plywood is going to do what you want at all. It will absorb high frequencies and that's it. You'll end up with a dead-sounding, boomy room.
I also don't think that lattice is going to do what you want for a diffuser, but I'm not really very knowledgeable about diffusers. There are ways you can make poor-man's diffusion devices, probably the cheapest and easiest of which is to take a piece of 1/8" masonite and bend it with a little bit of radius, attach it to the wall this way, voila you now have a diffusor (whether it sounds good is yet another question). Diffusion can get extremely complicated when you begin to talk about broadband and 2D, 3D etc... it makes my head spin.
If you want a live-ish room, then don't stick R-11 everywhere. Realtraps Minitraps seem to have mostly reflective surfaces on them to preserve a bit of the reflective ambience at the top end, and hanging a couple of these at varying angles (particularly in the corners, where they are most effective anyway), can give you *some* diffusion. Of course a book shelf with some books, CDs, other junk on it can work as a decent diffusor as well, just not really fine-tuned.