Hi Frimbo
Essentually what is happening is that the regulator/steam lines can only provide steam up to a particular rate. As the cylinders operate faster, they consume more steam and eventually get above the rate it can be provided from the boiler. Reducing the cut-off reduces the amount of time the valves are open to let steam into the cylinders, which reduces the steam consumption. The expansion of the steam will still drive the cylinders at the higher speeds, so you don't need as much steam to keep the train moving.
Steam chest pressure gauges do exist, and appeared from I think the 1910s onwards. With, or without, the crew would still read the loco by feel, and sound, to get it 'right'. However, they are on a lot of locos today to help crews read the the loco better, as they tend to have a lot less running hours. Some locomotives had cut-off gauges or similar which worked in a similar way, but gave an indication to the driver if the cut-off was in the right place (I'm not 100% sure how these work, but IIRC it's still somewhat based off steam chest pressure).
Regards