I'll leave it to the professionals to give you the statistics and nitty gritty details, correct me if I'm wrong here guys. But the effect of fewer other players at the table will simply mean less cards coming out per round while back counting, but more hands/hour for you when you begin playing. Think about it, if you sit down at a table with 4 other people you'll have to wait for ploppys and guys who like to talk a lot to make their moves half the time whereas by yourself, you can zip through the shoe as fast as you like. And more hands/hour, assuming you are an advantage player who truly knows his stuff, means more money!
As Don demonstrated in BJA (see chapter 6, p 67-89), "floating advantage" (the idea that the deeper into a shoe you are, the more of an edge you have at a given true count) is really more of a theoretical advantage than anything you can use in a real game. So while it's nice when more cards come out per round with more people at the table you are observing to get to those smaller (thanks Dummy) denominators in determining true count, there's no real advantage to more people at the table. In fact you should be looking for those one-on-one with the dealer or one or two other player opportunites whenever possible.
As for the limit on sitting out hands at the table, you say you don't think you attract too much heat which is good, but it depends how much risk you are willing to take. A conservative AP may tell you: "Sitting out when the count goes south and jumping back in when it goes back up is just asking get a tap on the shoulder eventually. You may not see the pit making a fuss, but the eye in the sky is always watching and they'll catch on sooner or later." A more aggressive AP may say: "If you haven't gotten any heat so far, then why change a thing? If they're dumb enough to let you sit at the table and play only the hands where you have an advantage, then take their money!" My opinion is somewhere in the middle (I'm not that into astrology, but I am a Libra after all!): if you're pretty friendly with the regulars and even some of the dealers and pit bosses and your play hasn't seemed to attract any unwanted attention, you're probably good to keep doing what you're doing. If you want to take some precautions, don't be too obvious by jumping back in with a huge bet spread jump at a high true count, bet slightly above your minimum or below what the TC dictates you should and gradually raise after wins to the proper amount for your bet spread. I assume you only sit out after a loss since doing so after a win when the count drops would be suspicious. Basically, employ a few camouflage techniques, don't get greedy, and I think you'll be fine doing what you're doing. Keep in mind though that the longer you play, the more you have to adapt and that may mean shorter and less frequent sit outs and more table hopping, to name a few.
