I’ll giver a shot. I’ve hanged for a period with the Bib that I somewhat crudely fashioned on my own (a piece of black rubber pipe conector and a band clamp with accompanying screwdriver to tighten it) and am currently using the Redi-Stretcher, which I haven’t quite mastered yet, but recommend just for the sheer ease. Anyways I concur that #2 looks better. The farther away you can get it from the glans the better, it may not hurt immedieatly, but over time you could be sorry, remember your glans is a very sensitive little bundle of nerves, delicate, don’t test it.
I am a big fan of wrapping as far away from the glans as is possible, that’ll help the skin bunch up under the hanger and protect the glans as the weight just generally settles in that area. Because that’s where the hanger will usually stop, whether you have it contacting the glans, or have some bunched skin between them. Obviously, the skin between them is a better option (putting a helmet on the head so to speak).
As for how you change that hang there, does it feel like the hanger is loose around your dick? that looks somewhat remniscent to me of a loose ring on a poll. Of course it could have to do with the way your skin is bunching, maybe you’ve got more skin on the bottom than the top?
If that’s the tightest you can get it and it still doesn’t feel really tight on your dick, then I’d suggest getting out your tools and decreasing the hanger’s size. or get/make a new one.
It can also be the tightness of your wrap. If you feel it slipping and sliding down your dick, you can get ropeburn (I’m recovering from my latest bumbling there, I’d simultaneously weakened my skin by plucking the day before and slathering on the Kalo lotion, so do as I say, not as I do, hehe). When I used the bib, I liked the wrap as tight as you could get it and still be able to get the blood past it to squeeze the blood out of your dick before tightening your hanger (Never Hang Erect is what I’ve been told, and I’m willing to believe it), of course you do leave some there, but not alot (like in a heavy flacid).
Now if it has nothing to do with tightness, then there could be something unusual about your dick, some rather hard area that part of the hanger won’t go over as well as the rest of your dick. I’d require more information that I actually don’t want to know about another guy :D . In short, through PE you’re going to learn the ins and outs (heh) of your dick rather well in order to figure these things out.