Thanks mate, yeah I've done everything except for fitting the big window (wouldn't have had the guarantee otherwise) and had my brother give me a hand here and there, especially with some of the lifting.
I'm not sure how these lights are mounted - do you have a router? you could cut a pocket/chamfer the edge of the strings and cap over the top, thats the easiest/quickest way I can think of. *edit* just looked at the picture and I can't see how a router would fit.
as long as you leave at least a 50mm ventilation gap and leave down by the soffit clear then you can use whatever you want. If you want to insulate the area then use celotex/kingspan/etc boards which will do both.