David, Ballooning is always a result of "smoothing" as Little Dragon has already said, you can turn this off for individual items that are prone to ballooning by "unchecking" smooth polygons in the properties box, or you can do it for the whole scene in the render options. Be sure to knock down the minimum shading rate to 0.2 as this helps compensate for loss of smoothing to some extent.

As to your black blobs, this is usually caused by the "Bias" setting of your lights, Stefan [stonemason] gave a very good explanation and fix for this in another thread. You need to increase or decrease your Bias setting, can't remember which way for what, I'm at work now so I'll try and dig out the info when I get home for you!

Hope that helps a bit!!

Injustice will be avenged.
Cofiwch Dryweryn.