A hamon line to close to the edge means eventually with continued use and sharpening you will wear through the hardened steel. After all a hamon line is just visable proof of hardened and un-hardened steel. Also It just looks off when the line is to close to the edge, I think a good balance is about 1/4 to 3/8 but no more than 1/2 of the blade covered by the hamon and thats what I try for.
I've Been using Satanite that I got from Ellis Custom Knifeworks
Refractory & High Temperature Tools - Ellis Custom Knifeworks
Jens