You didn't say what type aircraft you're flying. As far as cabin overpressure, you'll have to refer to the aircraft flight manual and manufacturer data for specifics.
I don't think you're being picky. You're making a legitimate call as the Pilot in Command, for which nobody should question your judgement.
If smoke is truly the issue, remember that most supplemental oxygen systems are weak systems using a nasal cannula...even if you close your mouth and breathe through your nose, you're still going to get smoke. Even if you get a full medical mask such as a non-rebreather mask, you're still not eclipsing the smoke or providing any seal on the mask. It's better than nothing, but in a truly smoky environment, your eyes and lungs will still burn as the smoke contacts your mucus membranes. This still causes spasming, and still puts the toxins into your system rapidly. Yes, you're getting oxygen, but you're also getting the toxins, acids, and other elements of the smoke that kill you.
In most cabin overpressure situations the action is to shut off the bleeds and dump the cabin. The reason you're going on oxygen is to account for the upcoming cabin pressure loss. If you get an altitude light, normally it's just a warning that your cabin is exceeding a particular altitude. This usually takes place several thousand feet before emergency pressurization is activated, or before the masks drop, in systems where such things occur.
The altitude warning light may be tied to various functions...these are aircraft specific. If your aircraft is only warning of a ten thousand foot cabin and nothing more, then you're faced with two issues...one is an equipment issue (91.213, again), the other is a safety of flight issue which may or may not include donning oxygen masks. If the light activates, whatever it's purpose in your aircraft, certainly there's a prescribed proceedure to deal with it.
I think your last question was more specifically directed at the legal requirements of exceeding 10,000', however. There really aren't any, other than you can go normal speed

. As far as needing to return to 10,000 specifically, if you have an altitude emergency...you need to get down to whatever altitude is going to provide you a level of safety. I fly in a lot of country that won't permit going down to ten thousand...big rocks. You may need to get lower...see how you're feeling, see how you're doing. You may be okay getting down to 14,000...see what it's going to take with what you have and where you are, at the time.
For typical skydives, we often go up to 18,000. It's just a quick hop in most turbine equipment these days, and it provides a decent freefall. Above that oxygen can be provided with a little tygon tubing, but it's never available on the equipment I've been jumping. Quickly up to FL180, then out. I've never seen anyone on a jump get sick or become impaired or pass out due to the altitude. If one stayed up there for an extended period, perhaps. It's a little like a fire on board, however...folks have this mindset that they need to get down and throw caution to the wind to do it, when usually what's needed is to sit on one's hands for ten seconds and think about it, before acting. At lower altitudes, having a pressure problem generally isn't that big a deal. It should be dealt with according to the manufacturers recommendations, but a pressure loss at 18,000 just isn't the kind of emergency for which one needs to come screaming earthward in a desperate bid for terra firma and dense atmosphere.
You're doing the right thing by refusing to fly, or climb high until the leak is located. For all you know, the leak could be a cracked cylinder or valve assy...filling it might be more than a leak hazard. I've seen that happen (I replaced one such valve last year, in fact). I grounded the airplane, and the shop to whom I forwarded the valve assy said it was the first case they'd seen in something like 25 years. Better safe than sorry, and in that case, it was both safe, and not sorry. You too...nothing at all wrong with making a safe decision. Those that will fret about it should only be reminded that thanks to your safe decision, they still have the option to sit around and fret about it.