1. Generally the reel is in gear. This is especially true for AJ's in midwater depths. When fishing for grouper with dead baits, sometimes I'll "feed" them the bait by keeping the reel in freespool and playing line out. With live bait, neither groupers nor AJ's peck at the bait like perch on a nightcrawler (you'll be very aware you're hit). And when I say in gear, I mean just enough drag to keep the bait where I want it in the water column.
2. If you're asking about bottom fishing, always under the arm or already in the harness. From the rod holder, the line would be straight up and down (no bueno).
3. However much drag you and your gear can safely control is what I'd use.
4. I fish circles w/ live bait and Owner Jobus with dead. In both cases, after getting hit I smoothly (over the course of 2 sec or so I'd guess) move the drag to strike and reel tight on the fish (usually already in low gear) and keep cranking.
Once at your fighting drag (strike or full, your choice), the goal is "no line out" if at all possible. The crappy thing about fishing rigs, is that you can exert enormous pressure, but the fish can swim upwards toward the rig legs, creating enough slack to make it back and cut you off. Then all the drag in the world won't help unless you stay tight. This is why people pull away from the rig w/ their boats, to keep constant pressure on the fish (much more so than just by cranking).
Russ, I hope you're taking notes, cause I think my head would explode by this point.......................
For me though, I think I'm leaving all that heavy unwieldy bait fishin' gear at home for the 4th of July trip.
