Mouseferatu
Hero
Not really - if you double their hit points, they still come out ahead monsters without Insubstantial. Just not as much (i.e. by 100%, which would be the jump from normal to elite, hit point-wise).
This. You're not reducing the HP to the point where it's a zero-sum situation; just to the point where the creature's still within the realm of what's vaguely reasonable for its level, as opposed to doubling the HP.