Good lighting will be your best friend.
You can use a few passes of keylight, as well as some pre-keying techniques to help pull a cleaner matte.
Things like adjusting levels/hues on a duplicate copy of your footage, and then using it as a matte for your original footage would probably help.
SInce your camera records HDV footage, you may want to look into DVMatte pro, which is designed to pull a key DV footage.
Are you shooting in HDV? Your camera should give you some pretty nice video.
If the quality issue is related to the edge of the key then you'll just have to learn how to pull a better key. I'd suggest that you do a quick Google search for some Keylight tutorials. There are a bunch of good ones available. I pull good keys from HDV material all the time even when the lighting is less than ideal.
A still frame (field separated) or a few frames of your video would help diagnose the issues. Unfortunately there's no one click solution.
Is there a particular reason you are shooting on blue? Usually green gives better results for video (there's more of it, it's further away from skintone and there's less noise than blue).
As mentioned before, you might look into DVGarage -- it's really good as pulling smooth keys from particularly crummy footage. Also try the demo of Red Giant Key Correct Pro (they have a Deartifacter that reduces the blockiness on 4:2:0 HDV footage). Also try the demo of Primatte, which has a built-in deartifacter.
I can throw in a vote for Primatte as well. Eons ago we painted a wall in blue in our facility just for emergency pick-ups and it has no proper depth, but Primatte can key that without much ado. Specific to your other concerns: Do not forget, that it doesn't matter how you generate the Alpha. It's quite possible to overcrank contrast and brightness in the weirdest ways just to get a good key and then use that result, which is generated in a pre-comp, as amatte on the original source. Similarly, you can generate a second matte from that, that only covers the borders. If used as an adjustment layer, it can serve as a basis for removing color bleed or it can be used as a driver map for Compound Blur to adaptively smooth out rugged edges. If you can post a sample frame, we can certainly provide more guidance...