Using less water, or twice as much dye powder, should make the colors brighter. At some point, however, the increased pH from the trisodium phosphate or soda ash in the dye powder mix will cause the resulting color to be kind of splotchy.
Using enough warmth will allow full development of the color, as compared to using temperatures lower than those recommended in the instructions on the back of the package, but additional heat won't make the colors any brighter than that. The instructions say to use hot tap water, 140°F, if I recall correctly. This is because Dylon Permanent Dyes contain Drimarene K and, in one case,
Remazol dyes; these dyes are less reactive and require more warmth than Procion MX dye does.
You can apply the dye to dry fabric, after you've mixed the dye with the recommended amount of water, but I don't think you can get sharp colors, or completely prevent the colors from running together, if you use Dylon Permanent dye. It's not designed for color mixing or tie-dyeing.
Pay close attention to the instructions on the package! Each package is intended to dye only 8 ounces of fabric.
Also see earlier discussions, here and elsewhere:
Paula