I have sorted the second issue by amending the new member post limit to '0', but will keep an eye on it and adjust it if this causes any further issues.
The first issue is partly sorted. I have changed the CAPTCHA module settings to Q&A CAPTCHA on the drop down menu button, configured a question and an answer, and then submitted the change.
When I come to try out the user registration process I get the following message pretty much as it was before, but there is no CAPTCHA confirmation code shown? Any thoughts what I've missed?...
'CONFIRMATION OF REGISTRATION
To prevent automated registrations the board requires you to enter a confirmation code. The code is displayed in the image you should see below. If you are visually impaired or cannot otherwise read this code please contact the %sBoard Administrator%s.
Enter the code exactly as it appears. All letters are case insensitive, there is no zero.'