There is only one chamber, and though some mixing "emulsification" does occur, for the most part, think of it as if the oil and gas are seperate.
yes, you could have too little oil - seme reason shock can only be mounted "cylinder" up - otherwise piston strokes through gas not oil - i/e no worky.
didn;t think to calculate / estimate min oil - I'd be suprised if you had a need to use less oil than they come with. If for some reason you found you did - removing a few cc will have quite an effect on "spring force/curve" and prob wouldn't cause a prob - but use caution, and don;t go dumping out half the oil
if they had 16" when i did it - I would have used em
only drawback to 16" (assuming unlimited mounting space) - is that my spreadshet wont work - I'd need a 16" shock to measure to make the adjustments
HTH