Not sure about nitrates, but I think you are OK up to about 5 ppm. But I know with my tank, when P04 is lowest (0.00 readings on my Hanna) is when I get my best SPS growth and color. Of course this does vary by SPS type, as some are definitely more tolerant than others.
Algae also really loves P04, and is hard to eradicate once it takes hold, even when both P04 and N03 are back to zero. The thing with algae is that it traps detritus and will grow in rocks, sand or wherever it can find some nutrients. That's why some manual removal with a toothbrush and turkey basting to keep your rocks clean is necessary. And I think the light spectrum you use will help or hinder algae.
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