Hi Joe,
You need to change how your layers are blending together for the medial-axis carve. Just change your canvas' Z-Fill in the Canvas Properties to the top of the canvas and then change the blend mode for all of your text-layers from the default "Maximum" to "Subtractive". Everything is a height value and it's mathematically adding all of the layers up using the chosen blend mode for each layer.
As for vertical spacing: I have been trying to figure a painless way to integrate multi-line text editing in there but there are some obstacles to overcome but that's been the plan for now, so that you don't need to use multiple text-layers for multi-line text. I'll keep working on that after the new update goes out soon :)
- Charlie