You ask is it wrong to try to get flat arrow flight out to 35-40 yards. Nothing wrong with trying to get a flatter flight, as long as other things aren't overly impacted (overbowing, too light an arrow). If you are wanting to kill at 40 yards, a stickbow may not be the best choice (not that people can't do it).
I'm new like you and only feel confident shooting in the 20 yard range, but hoping to get up around 25 (with the right conditions). I'm shooting 51 # at my dl and about 10 gpi.
In answer to your second question, some trad shooters use a point of reference (placing the arrow tip) and others use instinctive shooting (which sometimes includes a subconscious reference to the arrow).
The goal with instinctive is when you see it you shoot it! Easier said then done and takes practice. Sometimes it happens and other times I scratch my head.
Good luck!