I think you'll find a lot of different answers to your last question - where "should" it be, where does one like to wear it could be anywhere, depending on one's aesthetic. On the my most recent kilt, the centerline of the top buckles (and in my case, only buckles) hits at my navel. Above that is two and a quarter inches, and the waistline is flared a bit extra to fit my torso. This is, for me, the most comfortable and proportionally correct kilt I have to date.

Be sure and check with your kiltmaker, however. Some will want the total length, but the measurement I gave was from centerline of the buckle (the natural waistline and smallest circumference) to the bottom edge.

Regards,
Rex.