"
If I simply add the two analgue channels together (after decoding) to
give a monaural signal would this reduce the distortion or would I need
something more elaborate and 'digital' to achieve it?

It wouldn't improve anything, I'm afraid. The problem is that the bit
rate is too low and it provides a poor representation of the signal
(even with imperceptible frequencies removed), so adding the left and
right channels doesn't remove the fact that both channels are poor
representations of the respective channels.
"

That's a pity. On FM with poor reception one can reduce noise by
taking out the stereo decoder. On NICAM (TV) sound on channel 5 (via
analogue transmission) I find I can reduce the distortion by switching
the TV to mono (why is channel 5 so much more distorted than the
others?). I had hoped that DAB might allow something similar. I
guess that if the distortion is uncorrelated between the two channels I
might reduce it by root(2) by adding the L and R channels. That would
give a 3dB reduction perhaps.

"Radio 3 at 192kbps is too low to match FM, let alone the 128kbps
stations. "

I listen mainly to Radio 3 and subjectively I do find it pretty much as
good as FM. I don't mind accepting a very small amount of distortion
in order to remove the background hiss; I am not able to put up
external aerials. Classic, however, is noticeably worse than FM and
things like the World Servcie are very distorted indeed (and in mono).
What a pity we in the UK have ended up as the 'poor man of Europe' with
regard to DAB sound quality.

Robert