I see you are using a computer fan to circulate air in your cabinet, but do you have an extract fan? Even though CFL's don't create much heat, it does build up over time. You need to get another PC fan (I use a 3.5" for extract in my small cabinet) and if you can, make a nice round hole for it in the side, right at the top of your box. A passive intake hole at the bottom of your cabinet would also help. You can use old black stockings to act as dust filters and reduce light leaks.

You can get the lights much closer to the plants than that. I try to keep my CFL's within an inch, but 1-3" is good. They won't burn the leaves unless they pretty much touch them. I see the lights are fixed, so I would use something to raise up your plants to make your canopy more even.

What medium is that you are growing in?

What are you planning to do once they get bigger? Are you planning to take them back outside?