So are you absolutely stuck on having the video/audio specifically ON the phone? There are several options on the computer that you can use and have a plethora of options to pretty much do anything you want...including iMovie for mac (which is awesome, but im sure you knew that). I think that iMovie on the iPhone is a cool little toy, but its functionality has prevented me from actually seriously sitting down and using it because it just lacks some very key components that i find necessary (and no, i dont expect the mac experience on the iPhone, and for the price, i think its a nice addition to your video capabilities).
iMovie's appeal is its simplicity, and i also think that, to many, its limitations are what appeals to them, because its so easy to pick up, there arnt overwhelming amounts of options, and the layout is clutter free and easy to pick up and use. The audio i found to be the biggest weakness because you simply dont have enough options, you add one song, and that's it, no merging, no end fade and from what i saw, no loop...once it ends, its over, even if your video is still going...the music WILL however lower in volume if you use the video's audio at the same time, i thought that was a cool feature.
The length of video is really based on what format you plan on sending it, so the answers would differ from email to text to uploading...you can look up the various lengths on google though, they have a break down of them somewhere.
ReelDirector does have more options (i just took a few minutes and looked at the description and various options), but i think i would go with the Apple native app simply for the inevitable addition of most of those tools you'd actually use...that and functionality will almost always be assured with iMovie, where as ReelDirector, if it develops bugs or anything with future updates could be iffy...not that it WOULD happen, but thats really all i could go on since i still think a computer based editing software would be far more useful and valuable.