No, the fact that a report is made and withdrawn or not pursued by CPS doesn't mean it amounts to an offence. Reports are regularly not acted upon but that doesn't mean that it is proven that they are false.
I'm not sure what the defamation is? This could amount to defamation for certain but you will need to be clearer about what specific statement you are concerned about.
If the report is not untruthful but does contain exaggerations then it is quite unlikely that would amount to a defamation. It is possible but not likely. It depends upon the exact nature. Also, there are usually two sides to an exaggeration and it is therefore difficult to prove what has been exaggerated.
In any event, defamation is not a criminal offence.
If you can be clearer I might be able to offer more.
In terms of the truth being important, people lie all the time to the police. That is more common than truthful reports. Sometimes they lie upon unimportant things and sometimes upon more important things. They shouldn't but they do. That is the real reason for the low conviction rate upon sexual offences. It is nothing to do with outdated sexist attitudes. It is the volume of false allegations that leads to a high conviction rate. They are almost never prosecuted for perverting.
Can I clarify anything for you?