I think most of us are leaving the ATD on loose blocked to full advance while setting the points. Maybe it doesn't matter, but the less fumbling with the thread and horseshoe washer while the points are in position, the better, I think. By "thin paper," may we assume you mean rolling paper, which is thinner than most? I like to attach a clip lead to it as weight so it falls out on its own, rather than me trying to judge it while doing other things with my hands. I'm sure they probably work fine, but I don't care for the idea of the plug-hole stop device. It goes in at about a 45 degree angle, so break out your trigonometry.
Here is a picture of my "pencil." Graduations are 1/32" printed from AutoCad.
Richard L.