I prefer about 70, so its totally up to you. You will get many different opinions, so go with what you feel you should. If you want it higher, then yes, you can add a sponge. The instructions say no more than 2/3 closed because they have to have some external oxygen when they start pipping. I would open the vent a little ways before adding the sponge and see what effect it has on humidity. Then decide on the sponge.
How big are the cracks that are already in the eggs?
Everyone has a preference, but they can do just fine at 60-65