I was taught to use ONLY 'chi'n' not 'chi yn' except for Dych chi yn Llundain. (a place) Is that correct?
Yes, yn as a preposition should not be shortened. In its other usages it is usual to shorten it following a vowel.
Would the chi and yn normally be written as chi'n?
Yes. That should be the standard answer, really.
How would you say, "Not often enough!" ?
Dim yn ddigon aml! ?
That would be fine. In that context you could use nid in place of dim - slighly more formal, but common enough.