Ferromagnetic layers composed of Heusler alloys, which are predicted to be 100% spin polarized in bulk, have been incorporated into spin-valve sensors to improve performance. Transport studies of spin valves containing Co2MnGe (CMG) in the free and pinned layers show an increase in field-dependent magnetoresistance that is lower than expected. When 0.5 nm CoFe insert layers are added to the top and bottom surfaces of the 8 nm CMG free layer, the magnetoresistance increases by almost 25% relative to that measured in spin valves with CMG alone. Magnetometry data reveal that the transition between the nominal parallel and antiparallel states is sharp for samples with CoFe/CMG/CoFe, but it is sheared for samples with only CMG. To understand this difference, polarized neutron reflectivity (PNR) was used to probe the interfacial magnetic structure of spin valves with and without CoFe. Near the transition, PNR measurements for the CMG-only samples show spin-flip scattering. Fits to the data revealed that the free layer magnetization is canted relative to the field, and the orientation of the magnetization changes as the field is varied. The free layer reversal thus proceeds via coherent rotation rather than domain formation. In contrast, the absence of spin-flip scattering for the CoFe/CMG/CoFe sample in comparable fields indicates that the mechanism for the free layer reversal is domain formation. Structural analysis revealed that the interface between the free and Cu layers is less distinct in the spin valve with CMG alone relative to the CoFe/CMG/CoFe sample. Enhanced roughness may alter the coupling between the free and pinned layers and thus be responsible for both the undesirable reversal behavior and the reduced magnetoresistance.