At present, all physical models of diffuse Galactic γ-ray emission assume that the distribution of cosmic-ray sources traces the observed populations of either OB stars, pulsars, or supernova remnants. However, since H_{2}-rich regions host significant star formation and numerous supernova remnants, the morphology of observed H_{2} gas (as traced by CO line surveys) should also provide a physically motivated, high-resolution tracer for cosmic-ray injection. We assess the impact of utilizing H_{2} as a tracer for cosmic-ray injection on models of diffuse Galactic γ-ray emission. We employ state-of-the-art 3D particle diffusion and gas density models, along with a physical model for the star-formation rate based on global Schmidt laws. Allowing a fraction, f_{H_{2}}, of cosmic-ray sources to trace the observed H_{2} density, we find that a theoretically well-motivated value f_{H_{2}}∼0.20-0.25 (i)provides a significantly better global fit to the diffuse Galactic γ-ray sky and (ii)highly suppresses the intensity of the residual γ-ray emission from the Galactic center region. Specifically, in models utilizing our best global fit values of f_{H_{2}}∼0.20-0.25, the spectrum of the galactic center γ-ray excess is drastically affected, and the morphology of the excess becomes inconsistent with predictions for dark matter annihilation.