contenteditable issue and adding youtube videos

I have installed ckeditor 4.

Issue #1

In my code, I use <div id=editor contenteditable=true >My text....</div>

When the page is loaded, the page appears as if there is no editor.  I click on the element (id=editor) and a toolbar appears and I can edit the element.  - Works perfect!

I added this to my JavaScript
CKEDITOR.replace( 'editor', { customConfig: '/ckeditor/config_custom.js' } );
and copied config.js to config_custom.js.  I reloaded the page and the editor toolbar was immediately visible and the height of the element(editor) was not @ full size.  This is not desired.

I know that the editor is picking up config_custom.js because I then made modifications to config_custom.js.  The editor picked up changes.  Can anyone help me?

Issue #2

What should I add to my config_custom.js to allow a client to add youtube videos?

My config_custom.js below...

CKEDITOR.editorConfig = function( config ) {
    // Define changes to default configuration here.
    // For the complete reference:
    // http://docs.ckeditor.com/#!/api/CKEDITOR.config

    // The toolbar groups arrangement, optimized for two toolbar rows.
        
       
    config.toolbarGroups = [
        { name: 'clipboard',   groups: [ 'clipboard', 'undo' ] },
        { name: 'editing',     groups: [ 'find', 'selection', 'spellchecker' ] },
        { name: 'links' },
        { name: 'insert' },
        { name: 'forms' },
        { name: 'tools' },
        { name: 'document',       groups: [ 'mode', 'document', 'doctools' ] },
        { name: 'others' },
        '/',
        { name: 'basicstyles', groups: [ 'basicstyles', 'cleanup' ] },
        { name: 'paragraph',   groups: [ 'list', 'indent', 'blocks', 'align' ] },
        { name: 'styles' },
        { name: 'colors' }
    ];

    // Remove some buttons, provided by the standard plugins, which we don't
    // need to have in the Standard(s) toolbar.
    config.removeButtons = 'Underline';

    // Se the most common block elements.
    config.format_tags = 'p;h1;h2;h3;pre';

    // Make dialogs simpler.
    config.removeDialogTabs = 'image:advanced;link:advanced';
        
        //SCAYT enabled by Default
        config.scayt_autoStartup = true;      
 
        config.basicEntities = false;
};