> IM 6.2.8 - reduces the colors but distorts the image as can be seen

We tried your script with the current release, 6.3.0, and it worked fine.
We turned off dithering:

  $image->Quantize(colors=>16,dither=>'false')

and if you want highly compressed results you may want to remove the
IPTC profile which is 14202 bytes.
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