I asked because I thought I was using more, but it really shouldn't matter. The "range points" are the # of magnets you use, and it'll work from 1-60 magnets, obviously giving you more definition with each magnet you add (it's effectively a refresh rate, so the more magnets, the quicker refresh rate). 5 should be perfectly fine though...
If you measured the external circumference of the rear tire (as in, wrap painter tape around the middle of the rubber all the way around the tire) correctly, I don't see what could be the problem... If I were you, I'd simply increase the circumference # until I get the right speed (using a GPS to give you a baseline to compare with).