Fluid template - Category spacing too tall

[gsande +]

We are using the newest Fluid 4.1.6 template, and our list of Categories is now too large, and takes up too much vertical space. I would like to either
1) reduce the spacing between items
2) remove the underline between entries AND tighten up the spacing
3) Change the categories list to two columns (on the home page only)

On number 3 above, I HAVE changed the value in the Template Settings to "1" for the Number of category columns in the admin module, but it has no effect on the output.

I'll post separately as well, but I would like to remove the horizontal menu on the home page as well, but thus far have not figured out which file to edit, and what edit is required.

I am a new user, and would appreciate being pointed in the right direction.

Thanks
Gary