Dwarf sag will fill in good, but if the light isn't strong enough for it, it will grow taller than what you would think. I had some in a low light tank that I used as a background plant (10 gal) that grew 10inches tall. What you see in most tanks is some very high light plants. With that you would have to have a good dosing regime of ferts and CO2.
I agree with almost everything you've said except for the last sentence. Sag. likes trace elements, especially iron. Give it some iron (and other traces) after each water change and you'll get great growth. Iron and other traces should also keep it small.
A single fert. tab once every five or six months will do the trick also (I do both).
Sag. is one of my favorite plants so my bias is self evident.
In a 10, I'd put it near the back/middle and train the runners towards the front (gently moving the gravel around the plant, while not actually touching the plant or its roots). That way you get tall plants in back, medium plants in the middle and small plants up front....all on the same runner.