The thing about Cheato is that it also grows in a ball form for the most part unless you have way too much flow going. This makes it look like it may not have grown as much as it has. But like Bill said it all has a mind of it's own. I know I've had several different caulerpas that at times have drowned out my cheato, lately it's been the opposite. Not really sure why but not really too concerned either as long as they are doing their job.
As far as thinning out goes. I usually don't "try" to let it get to more than about half to three quarters of my fuge in size. I have a fairly large fuge though so that may make a difference.
I have a cheapo 130 watt power compact light with very old bulbs. Don't really care about the spectrum but I think they are a 10K and 6.5K.