[CalebD]

Good for you for pushing your limits - safely.
I have been out on a Sunfish with another adult human (and a cooler) in winds around 20 knots and boy can that be fun! Get the boat onto a broad reach, raise the center board a bit and hold on as the hull planes and takes off on top of the waves. Of course that was in the summer so when we dumped the boat the water was not really cold.
I'm not sure I'd want to take a Sunfish out with winds 30 - 40 knots by myself. I would have to do what you did: dump most of the air. The problem is there is no easy, practical way (that I know of) to reef that Lateen rig unless you had a smaller sail you could use.
Still, good for you.

 

[CalebD]

That is a sunfish sail, good eye! but it's on a Dolphin Sr, which was intended for a slightly bigger sail. However, in the Dolphin community, the sunfish sail is often much easier to come by....

It may be hard to believe, but I've seen images of the original sales brochure for the Dolphin Sr, exactly like mine, and it portrays up to 4 people on the boat at a time!!! I know that last summer, with my cousin sitting with his back against the mast, the boat was slowed down a lot.

Then your cousin's weight was not in a good spot. Riding up forward on small boats like this will kill your speed quite effectively by pushing the bow down so the boat has to plow through the water. Weight distribution is key to getting small boats to move at their fastest.
I could see 2 full grown adults riding comfortably on your Dolphin Sr. or maybe 4 light teenagers - not 4 adults.
Here is a spec sheet for the Dolphin Sr.: DOLPHIN SENIOR sailboat on sailboatdata.com
It is difficult to tell from that spec what size sail area (SA) the boat was designed to carry. I'm sure the Sunfish lateen rig works just fine even if it is a little smaller.