To get the behavior you expect with the first issue, simply Delete Clipboard after your Insert Text by Pasting. Some of us prefer to keep that text on the Clipboard, but that's what you do if you don't.
The second issue sounds like a conflict either with the application or other utilities or perhaps with your own macros. Take a look at Brevis, which can either paste or type your text expansion depending on the lead typed string character (not hot keys). Try a few of your expansions in Brevis and see if you experience the same behavior with pasting and typing.
At the moment I have 71 text expansion managed by Brevis, which is a single macro. So I don't think memory is an issue with Keyboard Maestro.