Yeah, it's gotten quite bad in the past weeks. Hope this will get sorted out soon.

People have to pass a CAPTCHA test to register; that might mean that people are manually making a user name and then spamming. It is bothering me too but I don't know how it can be avoided

The pattern I have seen, is that there will be 3-4 posts by a single "user" at virtually the same time to different parts of the forum. Sounds like a bot to me. Thing is, certain CAPTCHAs can be circumvented by bots.

if you see any, just mark it as 'inappropriate' so the mods can find it easily. (only needs to be done once per post i think, and the mods are usually intelligent enough to block the user and delete all their other posts)

Yeah... I've been doing this for quite some time now, that's why I noticed it becoming more of a nuisance in recent weeks. And the mods do react pretty quickly. But it's not a good condition for the forum to be in.

There was just a string of six of them.
Is it getting worse, or does the spammer have more time to create the posts before a moderator can get onto it?

Well, phi.lho is doing a commendable job of battling these spammers. But indeed it seems those spambots really broke the zoho defences. Which means unless counter-measures are taken, the amount of spam is more likely to increase than decrease.

It would be more efficient to have a system where the user is approved based upon their first post like wordpress.com uses (of course in combination with a spamfilter). This would save moderators time, since the number of user first posts is lower than the number of spam messages. And more importantly, it would keep the public forum spam-free.

I can only confirm the feeling most of us already had a few weeks ago. The number of spammers / spam posts is increasing. Sure, there are options like pre-moderation and/or limited features for new users. Unfortunately Zoho doesn't support any of that. In addition there have also been slowdowns, multiple problems with email notifications, registration problems for some users/browsers etc.

Is this going in the right direction or is it time to start considering alternatives?

Yeah, I actually was also going to open a new thread with the question of alternatives.

I've noticed another problem regarding changing of passwords. I had an older processing forum account which was linked to one of my google accounts. Even after lots of trying, I couldn't change the password from the 'My Area' section. I don't know if others have faced this issue.

And then the recent onslaught of spammers and email notification woes too... Hope things get sorted soon. 

Yes, I think it is done by humans. Or a human being, an obstinate one. Most of the spam is ads for online video streams.
And it degenerates. The user names were vague attempts at looking like real pseudo, then they were random keyboard hits, and now, the subject lines when from random sentence extracts to gibberish. I just deleted:
sdgfhfgdfdgfdgfhgfg
asked by vvvbbnbnn in Android Processing  •  24 minutes ago
I hope this means they are being disgusted (the spam messages are rarely up more than hour).
I wish that Zoho offers more tools like IP displaying and blocking (I know it isn't a perfect solution, but could be OK for our small community), instead of stupid keyword detection inside innocent words. If, as I suspect, that's mostly one person (or small group) spamming, there is chance that blocking their IP, I can shut them down.