jQuery plugin to count characters

I wrote my first jQuery plugin. It counts characters in a similar way to what StackExchange uses for comment entries. You can see it in action with this fiddle.

I feel that it's messy, but I can't explain why. One of the default options is defined outside the defaults hash because it uses a self-reference, and the method for flashing the text seems out of place. I'm also a little worried about how it handles form submission, and its prevention when the minimum number of characters is not met.

I'm not very fluent with jQuery so I expect this to be atrocious. I would love to hear some feedback as to why, or how it could be improved.

The form is submitted via ajax, using Rails' unobtrusive JS.

(function ($) {
    "use strict";

    $.fn.counter = function (options) {
        var defaults = {
            minimumSize: 15,
            minimumWarning: " more to go...",
            maximumSize: 25,
            maximumWarning: " characters remaining...",
            warningSize: 20,
            targetClass: '.help-block'
        };

        defaults.defaultText = "Enter at least " + defaults.minimumSize + " characters.";    
        options = $.extend(defaults, options);

        function count(elem) {
            var size = elem.val().length, target = elem.siblings(options.targetClass);
            if (size === 0) {
                target.html(options.defaultText);
            } else if (size < options.minimumSize) {
                target.html((options.minimumSize - size) + options.minimumWarning);
            } else if (size >= options.minimumSize && size < options.warningSize) {
                target.html('&nbsp;');
            } else if (size >= options.warningSize && size < options.maximumSize) {
                target.html((options.maximumSize - size) + options.maximumWarning);
            } else if (size >= options.maximumSize) {
                elem.val(elem.val().substring(0, options.maximumSize));
                target.html("0" + options.maximumWarning);
            }
        }

        this.each(function () {
            var elem = $(this);
            count(elem);
            elem.keyup(function () {
                count(elem);
            });
            elem.closest('form').submit(function () {
                if (elem.val().length < options.minimumSize) {
                    $(this).find(options.targetClass).fadeOut('fast').fadeIn('fast').fadeOut('fast').fadeIn('fast');
                    return false;
                }
            });
            return elem;
        });
    };
})(jQuery);