I find that raising and lowering a pickup does several things. When I move my pickup closer to the strings I get more output and more attack. When lowering a pickup you get less output and a smoother sound. As the pickup is moved further away from the bridge the louder and fuller it sounds. The pickup has more string vibration moving over the coils.

If the pickups are too close such as in a Stratocaster I find you get too many overtones especially on the lower strings when playing up the fretboard. By lowering the pickups on the bass side of the guitar, I have better control with less overtones.

I press the strings at the last fret and adjust the pickup to 1/8th inch on the bass side of each pickup. On the treble side while pressing the string at the last fret, I adjust the height of each pickup to 1/16th inch. This usually give me a good balance especially on Stratocasters. If the pickups are too loud when using the middle or neck pickup, I generally lower them until I find the desired balance. The larger the diameter of a string will give you more output and a thicker sound.