Re: The higher/closer the pickup is = more output and thicker tone??
You have the best advice: try it till you get what you like. But what do you listen for? One thing: "pulling the strings out of tune" This is important, and you might not notice that the magnets in the pickups are affecting the sound because you have them adjusted just a little too low to hear the detuning, but maybe not quite low enough to get a good sound.
Try this. Go somewhere very quiet with your guitar. No amplifier! Your solid body electric guitar is an acoustic instrument (not a very good one, it is true!), and you need to hear it as an acoustic instrument. Adjust the pickups lower than you would ever use them. Play it for quite a while until you understand how it sounds. Also look at the strings carefully in a good light, especially the number one E string near the neck pickup. Notice how the string looks after you pick it (fret the 12th).
Now adjust the neck pickup as close to the strings as possible without hitting. Play, especially near the 12th fret. If your pickup magnets are strong enough (strat, some humbuckers, all pickups claiming strong magnets) you will hear a single string (try both E strings) beat against itself. Even if the magnets are not very strong, the guitar will sound different in a more subtle way.
If you have a strong effect, try picking and looking at the 1E string (12th fret). It might appear to hop or bounce.
This effect is not easy to understand, but this is what I think is happening. You can think of vibration of the string towards the pickup and across the pickup as different modes. If you start a string vibrating in one mode, it will soon go in the other as well. Modes couple! The magnets pull the string towards the pickup; they do not affect vibration across the pickup very much. So one mode is pulled out of tune, the other is not, the modes couple, and you hear both beat together. Not good!
So now you need find out how far down to adjust the neck pick up. It is good to know the distance for a small effect, and no effect at all. The other pickups usually have less "pulling" effect, but you should play with them as well.
Now go to your amp and play clean. Try to hear the acoustic sound of your guitar through the pickup and amp. Adjust the pickup heights; this is not the same thing as playing acoustic! Maybe even when you play clean, you overload the preamp stages a bit, and so the pickup height matters because the output level changes the harmonics made in the preamp stage. Now try with effects. You might want to adjust again.