I have a blog (Curiosity Cup) hosted on blogspot.com.
I have already tried what is described in this answer: My blogspot main page shows only 3 post but it's not working in my case.
I found the answer to the first part of my question: First thing is to use the page breaks so that your post gets shortened for the home page. Next things (and I was doing this mistake) is to NOT include images before the page break. Apparently I was including large images before page break and although they may or may not appear in shortened view but they were blocking the space that should have been used by other posts.
Answer to second part of my question can be found here: