I think u hav to b near it to spead also try putting torches and such up also it shouldn't b near any grass just plain dirt
I don't believe torches have any effect on Mycelium. But you (or someone else) needs to be in the area to have the chunk active.
And, grass can't be able to grow on the dirt... it grows fast if you are on the res and there is no grass ;3
With an Eff III + shovel, you can clear the entire first level of grass in < 10 minutes I'm sure. I've done it a few times.
It does not need water. Just a Dirt block to spread to. It seems to spread about the same speed as regular Grass. If you go to my Residence through the Farm portal there are some stairs in the center you can go down and see where I've been harvesting it. Once I harvest it all I put down more Dirt and leave at least one Mycelium in the middle. Eventually it all grows back as I do other things in the Residence above.
Or build a 10x10 platform in the air out of dirt like 8 blocks up. that's too far for grass to spread to and then put the mycel block in the middle. Go work on something else at your res and it will be covered in half an hour.