You will have to vary rpm to properly seat the rings. I've opened thousands of engines, and almost 80% (guessing) have "blow by" markings on the pistons. this usually only happens from improper break in.
Just vary the rpm for the first 200 miles, and all should be good.
By little lights do you mean the cowl lights? The OEM space for the front blinkers?
Lots of people here have done this mod, and there are never any issues.
The modulator is another ball of wax. The bypass used by many here is NOT a Kymco OEM type thing. The dealer MAY give you grief if you modify that, so I would let them handle that issue. Maybe go ahead, and buy a second module to carry if you have to ride after dark. Or at least a big, bright light to get you home in case of a failure.
For the tires... I ride in a 1-2 mile "loop" around a station w/ an air pump, and experiment. Varied terain/curves/straights ect. That way you can always air up if you go too low. 30psi plus or minus 4 is about the limits of what you want to try. Most find a couple less in the front to suit them best.
