One of the better ways I’ve heard is multi-member districting, where you have a slightly larger district with multiple reps (maybe 3-5 representatives) where seats are partitioned proportionately for that district. Voters vote for a party, and seats are apportioned to each party in accordance with their share (with some rounding). This guarantees a result that is at least as proportional (I’d posit significantly more proportional) as the current representative system, and maintain the ‘theoretical’ locality of representation, meaning constituents still vote for people representing their small localities.

There are different ways to assign representatives in proportional representation systems, but at such small scale you could have district-wide primaries where the top N finishers for that multi-member district are slotted into seats in the order in which they finished in the primaries.

Unfortunately this system is still imperfect, as strategic voting can still occur l, but significantly less so than in our first past the post single-member system. Also it excludes extremely small parties (>10% of the national electorate) from influence. It’s a tough problem.