I asked a question similar to this a while back as I am just starting out with the black powder cartridge shooting. I was curious as to the compression and got many of the same answers you have so far. I was also referred to the fall 2009 issue of Black Powder Cartridge magazine and the excellent article on various amounts of compression with ALL the various makers of black powder and what the effects would be on velocity, std velocity deviation, etc, etc. The author did a huge amount of tests and found the amount of compression varied little as to velocity effects and likewise on accuracy. What he did note as important was compressing the powder after a good trickle into the case, using a good wad and checking to make sure the powder did not swell out any before the bullet was seated. The author also noted to make a constant and smooth motion when compressing the powder in a single stroke which is what I do.
Over the past few months I have been using a homemade compression die just like yours and setting it so the powder is compressed just so the bullet is 0.002 off the lands for both flat nose and pointed. So far I am using 68gn of FFG and load by volume and just check the weight every 10 rounds or so. I have found the the weight varies up/down slightly over 50 or 60 loads but not enough to worry. I did also notice that the "70" measure on my muzzle loader powder measure (volume) does not equal 70gn by weight and also leave a slight amount of room in the case so I am happy with that.
As for final size, I do not think there is any chance of danger as long as the cases are lubed well as this is what is done with my handgun cases, especially the 357 magnum cases as they get a nice bump from the wadcutters being seated.