Steve Voigt
Hi Oskar,
1. I always use endgrain for durability, and that's nearly always how it's been done. I use cocobolo, mostly because I have a stash of it and it looks good. Lignum should work too. Ebony was popular in the 19th c.
2. It can be centered between the breast and the toe for planes up to about 22," but for longer planes (26", 30") it should be closer to the breast. about 3" from the breast is a good spot, because farther away the effectiveness is reduced.
3. I would never use a shoulder. It is a full sized mortise, whether the button is round or square. Both can look nice. The important thing is to have a good chamfer so it doesn't split.