The issue with this tutorial is that it advises to use Collisions to control the density. You should NOT do that. Collisions are not meant for that. This setting can make Skatter really slow very quickly once it starts to deal with large numbers of objects (it computes the distance between each object with every other object).
To control the density while avoiding holes and clusters, use the "Uniform" distribution type : http://skatter.helpscoutdocs.com/article/72-distribution#uniform
What you can do is load a Grass preset from the library, delete the Scattered Objects from the list and pick your own. That way you can see the settings I used to create these grass presets.
If you use "Render only", using proxies or not won't matter. But the original object definition is still stored in the model, so if you have a tree composed of 2 millions polygon, it will increase the file size (and slow down Sketchup at startup) and you should probably make it a proxy. But a small grass patch shouldn't be an issue.
You are probably looking for the Boundary Check setting : http://skatter.helpscoutdocs.com/article/68-areas#boundary_check
Set it as "Size".