Ended up capping the Shadows innate ability to only one controlled at a time. He can still create more, but they aren't under his direct control and are liable to attack the party. He was also given the ability to create a basic zombie instead of a shadow at his discretion. He has gained class levels in Oracle that allows him to control a number of undead as well. Any undead he creates with his ability can be controlled as long as it doesn't exceed this number. Its working well so far.
On the Incorporeal part, the party has found a magical dungeon and have discovered that the individual floors are actually separate extra dimensional spaces. When the shadow tries to go through a border, they find its springy like a bubble and have been too nervous to push through yet. He can still pass through material objects within the environment (I.E. chairs, doors, walls,) but the outer limits are barriers of sorts.
Last session he had created a shadow within the dungeon which immediately turned against the party as he exceeded his limit. He commanded it using command undead to flee down through the floor. The shadow hit the barrier and continued until it eventually poked a hole through the wall and out of the extra dimensional space. Now im trying to think of possible "glitches" to impose if the party returns there. I'm thinking a shadow that's partially constantly in flux. So shadow with blur effect.