You have to mute the input signal with the AI's (audio interface) mixer. That will get rid of the dry sound.
To get rid of the latency you will have to use a lower latency setting. Go to "Preferences" by pressing the "p" key. In the audio setting look for the "ASIO Panel" button. Click that and set it to a lower latency. You may have to try different setting as AI's can react different. Obviously, you want to go as low as possible.
If it is as low as possible, then you need to free up resources. You can "freeze" tracks that use soft synths or have a few plug-ins already. The more you free up by freezing tracks, the better luck you'll have with GR.
HTH