The Instar I stage is supposedly harder to digest and I take Dan Underwoods word for this as he investigates his information extensively.
The Instar I stage also cannot feed as the digestive tract is not complete until they molt to the second Instar. That is why you need to hatch, grow for a day, and then enrich. One 12 hour stage will gut load them, but a second 12 hours with new water and new enrichment will also have the nutrients assimulated into the flesh making them more nutritious.
Dan's Feed IMO is a superior product to the Selco/Selcon emulsions.
The emulsions make it too easy to kill off the brine nauplii when enriching them as it can give an oily smothering coating to the nauplii, and, it definitely doesn't store anywhere near as long as the powders.
The Dan's Feed has to be blended in water first, but while most don't do that with the emulsions, the emulsions would be better if they too were blended into the culture water.
The Algamac 3050 that Dan uses in his mix is a much higher DHA product than even the DHA Selco.
The water conditioner you mention I'm assuming is the Mic F Good bacteria which is added to the tanks to lessen the production of Nasty bacteria.
The health of the adult seahorses is ALSO a factor in viability of their fry.
When I was raising H. reidi fry, I had no luck until I started enriching live adult brine and feeding to the adults once or twice a week.
I guess that the frozen mysis wasn't quite enough for the best of health for the seahorses and after a few months of the enriched live adult brine treatment, I became successful in rearing H. reidi fry.
These are my own personal findings over the years, but others probably have other points of view and hopefully they will chime in here for you.
I almost forgot to mention that if you don't remove the uneaten food, it's not just that the fry will eat enrichmen depleted food, they could also be eating too much of the nauplii so that the nauplii pass through the digestive tract much too fast so that it's not digested properly and they don't get sufficient nutrition, even though the nauplii are enriched. Sometimes you can even see live nauplii coming out the anal opening.