Congratulations on your first mod. Those are some encouraging numbers (though to tell for sure how much is the mod and how much is you attempting to get the best fuel economy possible, you'll need to do some A-B-A coast testing and/or cruise control testing).
As for how far back to go with the air dam, I'd say go back as far as the bumper/fender does. You want to direct the air as smoothly as possible down the side of the car, which means trying to not throw air out to the side of the car. You might be okay simply following the lower curve of your bumper, as seen here.
Even a partial undertray can help, a lot of the aero mess under my car had to do with the wide-open underside of the engine bay, and it practically ducted air up into the front wheel wells. Having even a short undertray like this helped the air to go past that more smoothly. Though of course with coroplast you'll need to make sure it doesn't melt.
If you're going to use an undertray I think it's best if the bottom edge of the airdam is level with the tray, and that both are no lower than the lowest points on the underbody of the car. Having less air passing under the car is good, but if you lower the airdam too much you're increasing the frontal area of the car, which means the car's pushing more air than it needs to. From what I understand, an airdam lower than it needs to be helps compensate for not having a smooth underbody. (I forget who, but someone on here had a GIANT coroplast airdam on the front of their pickup and it helped a lot because of how aerodynamically 'dirty' the underside of your average pickup is)