1. How do I limit the number of images in EB Showcase to 1 image?
As you can see in Blogs >> Group Hikes >> SIGN UPS CLOSED: Rattlesnake Pt... , 2 images display when Layout>>Truncation is set to 1 image.

Based on what i checked, it seems like you doesn't use post cover feature, so i believe this setting what i help you set from your site is suitable for you, you can check my attached screenshot here http://take.ms/h3xBV and check on that Group Hikes category listing page, it should show 1 image for this case and look better now.

2. How do I control Image width in blog posts?
Images are displaying full width in above post even though Layout>> Post Covers >> Entry layout Post covers is set to 640 px

Regarding this setting what you referring is actually only work for if your blog post have the post cover e.g. http://take.ms/xQODc
If you would like to control the image width, you have to modify from the blog content (http://take.ms/rXdBBH), because this image is under blog content section.

3. How do I put a limit on number of images in a blog entry?
Is here a way to limit the number of total images a user can post in a blog post?

Unfortunately currently we do not have a feature to limit this at this point of time.

4. How do I control the size of images allowed to be uploaded to a post?
I have set the upload limit in Media manager quite small to 0.2 MB but EB still allows a 0.6 MB file to upload.

If you referring the setting from backend > Easyblog > setting > media , it will only limit when the user upload the image/file through Easyblog composer media manager e.g. http://take.ms/28Fag

If you upload through JCE editor and if i am not wrong, you have to set this upload limit from the JCE editor > profile > default > editor parameter > file system > upload file size (screenshot : http://take.ms/r5NAa )

5. Finally are some of these problems caused by using an external editor like JCE?
I'm trying to reduce cpu usage/bandwidth etc by putting some limits on images and sizes.

Currently i am not really sure what is your root issue yet, do you mean you would like to reduce all the image file size to lower?

Thanks, you've answered all my questions clearly

You are most welcome.

As a gentle reminder, kindly start a new thread if you have any other issue in the future so it will be easier for us to manage your inquiry. I will lock and mark this thread as resolved.