These are all good answers and it sounds like you've figured out some of the answers yourself.
Certainly there comes a point where the wind is too light to get the apparent wind working for you and you have to just go downwind and ease the sheets in that case.

Don't get too nervous about having to pull the main in and on when the wind increases. Sure you should, because that is where the sail should be set for speed, but the Mosquito mast is very forgiving and is not dependent on the mainsail to stop the top breaking off. I'm sure it could be done but no-one has managed it yet! Have a look at this South African Mosquito - full-bore with the main out. It's not a good look but the masts seem to cope alright.