Gerard,
You are asking all the right questions which is good.
I think you have had some dual instruction which is also good, if I have misinterpreted what you have written then I strongly advise you get some dual instruction from someone who has done military formation flying or preferably instructed military formation flying.
Maybe its your youth, but I hate to see the words "spice up" used for anything other than cooking. The fact that someone in your formation "freaked" means that things did not go as expected. He wasn't adequately prepared, things did not meet either your or his expectations - that is not good.
Some formation basics:
Always, always, always have an escape route.
Make sure your reference lines (you need three) provide adequate separation, pace it out on the ground, manhandle the aircraft into position if needs be.
Make corrections and rejoins in one plane of motion at a time -- forward, up, then in should be your mantra
It is easier to fly a closer formation than a wide one, less relative movement rolling into and out of turns
Make sure it is adequately briefed and do not invent things in the air. There should be no surprises, if there are make sure you get to the bottom of why the happened.
Establish SOPs (Standard Operating Procedures) for things such as:
Radio check ins
Formation change acknowledgements
Lost leader procedures
Loss of comms
Hand signals
Lead changes
etc
Did I mention, always have an escape route.
In my experience the most dangerous time in formation flight occurs when a lead swap is planned. Don't do it, but if you really have to do it make sure you both know exactly what to expect.
Formation flying is demanding, to do it well (to maintain the briefed position +/- zero) is tiring and rewarding. Take a break after no more than 10 mins, perform a simulated lost lead, break away, shake out the tight muscles, have a look around and then perform a rejoin.
Consider turning rejoins when you have a bit more experience, particularly as you don't have a large speed band to play with.
Remember, if an object in your windscreen has no relative motion but is getting bigger it means you are on a collision course with it - breakaway and try again.
Hope this helps and make sense. If it doesn't make sense please ask for clarification.
Regards
T