In my experience it's reasonable to have stops that are larger than targets for individual positions. Ultimately, what matters is the portfolio performance, and as long as I have a PF > 1.5 (preferably 2), I'm fine with the trade-off between individual stop & target.
It's not a clear cut question. I often take positions where I'm prepared to take a complete wipe out - 100% loss. Technically it's less than the upside when things go right but it's not generally in the spirit of the thing when people talk about loss size.