Finally we have some wise Americans! Uncle Benny and jbirdaspect, you both have some good points here.
Close racing comes from skills and setup. I'd say around 80-85% skills and 15-20% setup.
A setup is a tool, it isn't a finality. A good driver uses the best setup for him to maximize his skills, not the other way around.
Just to get an example, take Tweak, take the LX4 and double the engine size (2800 inline 8), you should be around 300-320 hp, which would surely be enough to ensure a good time, with the appropriate gear ratios...
Unless you are already good, you won't be able to come anywhere far from the WR.
Now give that tweak to the WR holder, and he'll beat his time easily... It is such a bullshit to tell that people are fast just because of their car, and it is as well very mean, and a clear sign of a frustrated mind. A sprinter won't remove a whole second out of his time just because he has the best shoes ever... It's the same for racing. It is a sport, some people are more talented than the others and unless you dedicate time to reach their pace, you'll go nowhere.
That said, close racing doesn't mean all the time fast racing. If you go to CTRA 1, you will have some close racing with people that aren't THAT fast (except the podium holder that usually have a gold or platinum license).
If winning is all what matters, or being relatively faster than the others, go to a drift server and start racing. If the two conditions above are what satisfy you the most, then you'll enjoy yourself a lot