Where do you have your sensor located? Do you have a fan in the keezer?
Even if the sensor placement is perfect and the fan is moving lots of air, the controller is only just so accurate. Your best bet is always to grab a thermometer you trust and tape it to the keg. Then adjust the controller so it's at the temperature you want. I would not recommend shooting for anything below 36F.
The cut in / cut out impacts how often your compressor turns on and off. Depending on your setup, 2F may be fine, it may not. Spend some quality time watching it cycle. If the whole cycle (on ... running ... off ... sitting .. .back on again) is around 45 minutes to 90 minutes you are doing fine.
No magic bullets ....