Basically what you're doing with this type of color change is intarsia. Instead of dropping the yarn, hold it over to the left when you start with the new color. Do this each time you change colors and they will become twisted and eliminate that gap.
Check out Amy's video on intarsia in the Advanced Techniques section.
"Trust the pattern!"
Time flies like an arrow, but fruit flies like a banana.
Hop aboard while we follow the cloud-covered van of knitting harmony, man!! Woooo!! --Hedgehog
IngridKH on Ravelry