I have no idea what make or model incubator you have or what your humidities are so I really can't answer your specific question.
In general, adding sponges will increase the surface area which will increase the humidity. A risk of this is that the water reservoir will dry out so your humidity will then drop. One way to handle this is to put some of those straws with the accordian joint together and use a syringe you can usually get from a feed store to put water back in the reservoir or directly wet the sponge without opening the incubator. Put the straw in through a vent hole.
When the chicks hatch, they need even more oxygen than normal. With 40 eggs, you probably have a pretty large animal mass in there. I'd leave the plugs out to get them the oxygen they need. But that can let humidity out. It is a balancing act. Maybe one plug in and one plug out depending on what your humidity does.
Probably not the answer you were looking for, but hopefully you can get something useful out of this. Good luck!
