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Is there a way to change the settings in Outlook so that an all day event is shown by a bubble taking up the whole day rather than just a small all-day event? Also it it possible to have all day tasks block you from adding further tasks that day?

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1> if the event is 'all day' then the small event is all you get. You are left having to specify the total task duration to get the visual you desire. the "plan a meeting" window OR the scheduling tab when creating a new appointment are the only visual tools available to show meeting conflicts.

2> all day tasks, like any task, will display a "conflicts with another appointment on your calendar" message when you attempt to create a new task/meeting/appointment. there isn't any setting to actually prevent double bookings - only your own common sense.

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