IS there any way to convert the report into something more positive? Should I apply for national patents even if the ISR is negative?
You have the possibility of getting a more positive opinion by requesting PCT Chapter II, also known as International Preliminary Examination, which is subject to payment to fees. You can choose any International Preliminary Examination Authority that you have the right to depending on the Receiving Office with which you filed your PCT applications. If you filed your PCT with e.g. the Spanish Patent and Trademark Office (OEPM), the IPEAs available to you are the OEPM and the European Patent Office (EPO); with e.g. the EPO as Receiving Office, the only IPEA available to you is the EPO. You can find this information in Annex C of your Receiving Office in the PCT Applicant's Guide.
If the International Searching Authority and the IPEA are the same, you must file claim amendments and/or arguments, otherwise the same negative written opinion will be issued by the IPEA because it is drawn up by the same examiner. If the IPEA and the ISA are not the same, then it could go down differently even without claim amendments and/or arguments.
You should not take the ISR nor the written opinion at face value, they might be wrong, or a different set of claims might be patentable, or the subject-matter be found patentable by other patent offices. For example, a written opinion drawn up by the EPO has, in my view, little value when it comes to the patentability in the US, and vice versa. Opinions drawn up by the German Patent and Trademark Office (DPMA) are valuable for patent prosecution before the EPO and vice versa. But I cannot say the same for the OEPM-EPO pair; it is not bidirectional though, OEPM opinions have not so much value when prosecuting an EP patent application, but EPO opinions have relevance when prosecuting a Spanish patent application.
If after reviewing the prior art, the objections, and the description of your PCT you do not see any way out, or at least some inventive subject-matter that would confer you an adequate scope of protection, then abandoning the PCT to prevent its publication could be a wise move (to be requested at least 15 days before the 18 months have passed from the earliest priority date/filing date). That is, if you do not want your PCT to become prior art or draw your competitors' attention.