in answer to your questions
- Directly overhead and very close by signals tend to overload the receiver. Dotted lines indicate a estimated flight-path based on historical data, in case of a dotted line your receiver is not in contact with the aircraft at that point in time.
Same goes for the Skyaware web app, dotted lines indicate that the aircraft is not detected by your antenna and and the programs then uses estimated tracks based on historical data for the same flight.
The choice to prioritize local aircraft over distant aircraft is totally your to make.
In this post you can find the tools and the steps you might want to take in order to get the gain set correctly: