I agree the terminology can be confusing. I have a placard to remind me of the maximum flap speeds, and it is labeled "one notch" "two notch" "three notch". Up means all the way up, against the spar.
And yes, if you use one or two notches to shorten the takeoff roll, you do need to remember to get the flaps all the way up before accelerating too much.
I disagree that it is best to glide a little on the fast side. At gross weight, no wind, best glide is the best speed. But at lower weights, you want to slow from the gross weight number (like the ratio of the square roots of the weights). Into a headwind, a little faster. But with a tailwind, a little slower. I find that often it happens that the plane is under gross by a fair amount, say, 10%, and you have a 15 knot headwind, so the two effects nearly cancel and published best glide works best. But, it all depends on the particulars.