You asked me for recommendations and I thought creating this list might be the best way to do it :)
Here are a few recommendations about what to do to get the most from your visit. Staying this long in Iceland I would say it is almost guaranteed that you will see great northern lights. The best way to do it for you is to stay active and remember to look at the sky. Without exceptions the best northern lights I have seen happen when I am driving out of town somewhere.
Places that you might want to stay in for couple of nights: