Yes, when you have 40 seedlings or more on an asteroid it will cease to produce seedlings. I dont know if there is a limit to the amount of seedlings you can have on a particular asteroid however, I have had more than 500 in some cases.
The levels of strength, power and speed are influenced by the asteroids size, as is the core energy of the asteroid. I am not certain whether this is always true or whether you can script asteroids to have high stats and be small.
I find a simple strategy is this, always scout every asteroid you can see to be aware of any threats before they arrive, use the majority of your seedlings to build more seedling trees and always place these trees on the asteroids with the best stats you have access to. This way you get the best seedlings you can as quick as possible with the largest numbers. Defense trees are best used on critical locations such as choke points or objective specific asteroids as they can cause tremendous damage to large numbers of enemies. They are also needed for manufacturing laser mines but generally most of your trees should be for seedlings.
Good luck !