Blennies are lots of fun. I got mine with the same goal of attacking hair algae after adding better lighting. It does seem to go after hair algae, but it also puts "kissy lips" all over the glass to eat diatoms and will eat the Nori that I put out for Tang.
Blennies are very good at acting unobtrusive, and mine found a lair under a rock where it just sticks out it's head to watch it's tank mates. I think it would do fine with the damsels and I have 2 mated 3 strip damsels and 3 blue damsels although dispite all the warnings, mine don't seem very aggressive or territorial.
As for hair algae, you'd have better luck adding a phosphate reactor and making sure that your nitrates are under control. This should be your first line of attack.
I'd also recommend emerald crabs and sally lightfoot crabs. The sally's will come out with the lights on and are fun to watch. (I thought I lost me emeralds, but I occasionally see them when the lights are out. I added 7, but I have no idea how many I may have.)
btw, my parameters (phosphate, ammonia, nitrites, and nitrates) are all undetectable now. My hair algae quit growing and has started to slowly recede in areas, but still grows strong in others.