Measuring from the 3/4x8's to the bottom of the flange I have
1 1/2" exactly. 3/4 subfloor (23/32") plus 1/4 underlayment
leave a huge gap

I don't know if you mentioned the type of flooring you were going to put
down?

If you're doing tile, put down the 3/4 subfloor, then 1/2" backerboard (I
like Hardibacker), then the tile. That should work out quite close to the
1-1/2" total thickness (depending on the tile thickness, of course).

If you're doing vinyl, just lay a second layer of 3/4" plywood (or 1/2" ply
and 1/4" underlayment).

Anthony