The floor level is either 38 or 39 (can't remember off the top of my head at the moment). Above that only guardians spawn, below that normal hostile mob spawning rules apply. Just checked, floor = Y39.
I used light blue stained glass around mine. I built a blue orchid farm in a swamp to get the light blue dye.
That's the best way to get light blue dye, otherwise you'll use up a LOT of lapis
My guardian farm has both collection only and XP modes (controlled by a button).
For my farm I chose the brute force design methodology. I created a large floating spawn ocean that occupied the entire 58x58 monument area and is 16 blocks deep. The spawn ocean is supported on open fence gates (signs caused too much lag).
Below the spawn ocean there is a funnel that flushes the guardians over a 4x4 drop into a 4 block deep lava softener.
The trick here is to have the water flowing over the drop so that guardians don't jump. They just flow to the center and sink.
After sinking through the lava softener they bounce around on a bed of hoppers until they burn to death.
There are 4 hopper pipes feeding dual droppers that fire items into a water stream which carries them to an item elevator.
There are 4 sorters for shards, 2 for crystals and 1 for squid ink, and a final stack of chests for unsorted or overflow items (fish). Squid ink is collected by a ring of hoppers around the drop (before it falls into the lava).
The stone button switches the farm to XP mode by releasing water across the hoppers and opening a path to the kill room.
Guardians flow down to a single water source block and I toss harming potions to kill them and collect the XP.
I turned off entity cramming because it messed up the farm, and it was really designed for servers anyway (it should have defaulted to off for SMP in my opinion). I suppose you could try a larger collection area if you don't want to mess with rules.
The basic farm design has worked since it was built in the late 1.8 series, but I did have to completely replace the item elevator when they broke the old fence post based design. That also required moving both droppers to the same side (originally they were on opposite sides feeding dual fence post item elevators). So that was some major reconstruction. XP mode was also added after the original build, but I was able to do that while the farm was operational.