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Some folks think about about proper loft all day every day:)

What bob said,52 is middle of the road for face lathering and bowl lathering IMO,you want a looser knot, you go higher,stiffer you go lower.
Your questions really have no pat answeres,sorry.

The loft setting, will in your words make the knot looser or tighter.

An all around good loft is about 52mm,depends on the knot,52ish will serve you well.

The loft is from the very top of the handle to the tips of the knot.You measure it.