Paula

I've never had groups larger than 4, for many of the reasons you've cited but also all of the research and  literature on social loafing. As group size increases, so does social loafing (http://www.owlnet.rice.edu/~ajv2/courses/12c_psyc438001/Karau%20&%20Williams%20(1993).pdf).  Frankly, when you get groups larger than that it's easier for people to melt in the background. I just don't buy the argument that groups of 6 - 8 people can be as productive as groups of 4. It's more work for me, but that's okay. 

As for concept clarification, do you not allow students to look at their notes or other reference materials? I structure my questions so that it requires an understanding of the concepts but I allow them to look anywhere they want for information. I got another great practice for concept clarification from the NUS-Duke school of medicine in Singapore. Following the T-rat they ask teams to identify a question or concept they want clarified and have them write it on the board and then assign that question or concept to another team to explain to the class. Building on that idea, I write the team numbers on the board during the T-rat and have teams write their questions next to their number as they complete it. Once everyone is finished I assign the questions or concepts to another team and give them 5 minutes to develop a 2 minute presentation to the rest of the class that involves everyone in their team, with no notes or books. I use the presentations not only as an opportunity to identify the concepts that they're struggling with, but also to evaluate their comprehension when they present to the class. At the conclusion of each 2 minute presentation I ask the class to indicate their comprehension of the concept by raising their two hands with the number of fingers displayed that reflect their comprehension (10 = total comprehension).  If I see fewer than 10 fingers or if I personally feel that more could be added I interject with my own comments. This process totally negates the need for a mini-lecture, and more importantly, focuses on the topics that the students need clarified, not what I think they need clarified. 

As for the timing of exercises, I'd start by reducing the time frame that they have to complete it. I find that if they have too much time they get off topic. You can also have them complete ALL the components of the exercise in a longer time frame. For example, complete five questions in 45 minutes. Then you can circle around to the groups who finish first to determine if they've really fully addressed the questions ask. I usually find that those who finish first aren't the most capable groups, but generally those who want to get it done and I find holes in their responses, which I quickly point out. If you need to have groups come up with a correct answer and a discussion for one question before moving on to another, set a separate and tight time frame for that question, and another time frame for the remaining questions. For example, it's not uncommon for me to start with a choice question to begin an exercise and I'll tell them that they have five minutes to complete it (I use www.online-stopwatch.com and project it on the screen at the front of the class). At the conclusion I have everyone show their answers, we have a brief discussion and then I tell them that they have 45 minutes to complete the remaining questions. 

I hope this helps. 

Cheers, Tom