I have Asian ambulia - Limnophila sessilfolia. It needs at least 2 WPG in my experience to grow well. With 2 WPG (I have compact fluorescent lighting) the stem grows with short nodes between each leaf, so it looks a little bushier. At lighting levels of 2.5 WPG and above, the stem grows faster, and the space between the leaves lengthens. I think both forms are very attractive. Give it CO2 and lighting at 2.5 WPG or above, and you'll be trimming it twice a week! It's very easy to trim. I need to shorten it since it gets tall. I trim off the bottom few inches and replant it. It doesn't matter if you trim off the roots. It will grow new ones very quickly. Sometimes a side shoot forms - you can trim this side shoot off to make a new plant or you can leave it on the main stem to create the bushy look. When topping off and replanting, I have found that burying the bottom leaf in the substrate will help to anchor it. This leaf will rot under the substrate, but it won't hurt the rest of the stem. You can trim with this in mind - leave an extra leaf on the bottom to help anchor the new cutting back into the substrate.
The substrate doesn't seem to matter in terms of how well it does. IME, lighting is the main factor in determining how well it will do. I have had my ambulia in regular pea gravel, pool filter sand, and Eco Complete. It has done very well in all three types of substrate.
I have never had "needles" fall off and make a mess. If the lighting is poor, the whole plant will wither away. I have never seen it shed its leaves down to a bare stem.
I have seen a plant called Limnophila indica online. It looks just like my Limnophila sessilfolia. I don't know if they are, in fact, the same plant or not.
For the other species of ambulia, I think you are referring to Limnophila aromatica. I have seen this species grow up out of a 40 gallon tank. It's very pretty. I have never heard of a plant referred to as a dwarf ambulia.