how close can i have my lights

Get that incandescent light out of there...Not only is it too hot, it's not the right spectrum for your seedlings. Get some Compact Flourescent Lights (CFLs) or some flourescent tube lights (the "cool white" variety). The closer the lights are to your plants the better (more light). But make sure the lights aren't too hot - hold your hand near the top of your plants, and if it's too hot for your hand, it's too hot for your plants. In that case, raise the lights until it's no longer too hot.