Ditto to reelbigfish. Eyes of pike are more to the top of their head (seeing more above them), so I try to keep the bait above them. In a lot of years of shanty fishing, I don't think I have ever seen a fish swim in above a bait and dive down at it....they always come in directly at the same height or below it. Thats my $.02.
I do the button too. Last weekend I screwed up and wasn't paying attention and was fishing shallower than normally (different lake) and didn't adjust the button. The flag went up, saw the spindle spin on my polar and then stop. When we pulled the tip-up out the hole, the button was resting against the line gider/bait keeper by the spool. UGH!!! I yanked it right out of the fish's mouth. Rats.