What is the best way to get Last Activity Dates to reflect on credit reports versus closed or charged-off dates because there is a big difference in legal reporting time when considering the two?

There is no difference. The DLA indicates the last activity noted, whether it was the last payment made by the debtor or the time the account was charged off. If a debtor makes a payment after an account is charged off, then the 7 year credit report requirement is restarted.