04 Rear Hatch not pulling flush with rear

It doesn't appear it can close any further. Its not quite sitting on the rubber bump stops located at the bottom sides of the hatch opening. You can try closing by hand or the auto shut and it closes the same. The edge of the hatch sticks off about 1/4 - 1/2 inch from the edge of the tail lights. This is supposed to be flush.

Is there a way to adjust the striker or the latch on the hatch itself to have it pull tighter?

Try to adjust the striker, you might not get that much adjustment out of it though. What happened to get it out like that?