Andy: You can answer your own questions. Here is how: Write your house rule so that it is crystal clear as to what constitutes the hand being dead. If the player has to release the cards, then your rule might say something like "Any hand that is moved forward and released by the player, where any part of the hand touches or crosses the line is a dead hand." OR "Any hand that is moved forward, where any part of the hand touches or crosses the line, regardless if released or not, is a dead hand."
It all depends upon how you want to write your rule. If you think you have angle shooters that are trying to get a reaction by moving their cards forward, write a rule that resolves that problem. For example, you could reword the last example above to say, "Any hand that is moved forward, even if the hand does not touch or cross the line, regardless if released or not, is a dead hand." I am not advocating such a stringent rule, but it is an example only. My opinion would be that if you were to adopt such a rule, there is no point to having the "Dreaded Line."
You need to decide what you want to do, what kind of actions you want to prevent and write you rule accordingly. THEN, you need to make sure your players are aware of the rule, especially if you have changed something.
Chet
btw: As to your last question, every place I have ever played that uses the betting line, has PLENTY of ROOM behind the line for a player to twiddle his cards or whatever without coming in contact with the line. If a player has so many chips that there is no room, that is easily resolved by a color up, regardless of whether it is a cash game or tournament. Again, answer your own question by the way you write the rule.