No, I don't recommend simply using the v1.3.7 files on v1.3.5 without doing a complete upgrade.
Since you're using uppercase letters in the email address you use on PayPal, I suggest making the following change in the code:
/includes/modules/payment/paypal/paypal_functions.php
line 60 says this:
Code:
if ($postArray['business'] != strtolower(MODULE_PAYMENT_PAYPAL_BUSINESS_ID)) {
change that to this:
Code:
if (strtolower(trim($postArray['business'])) != strtolower(trim(MODULE_PAYMENT_PAYPAL_BUSINESS_ID))) {
That should force more intelligent matching between the address returned from PayPal and the address stored in your cart.
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