Kurt-
If you spend a bit of time doing a search on q switch on the club, you'll find tons of technical info about them. I'll try to give a quickie here:
The tone controls are actually low-pass filters. They cut everything above a certain frequency. The range is 350 to 6k. So, completely counter-clockwise you're only getting 350 and lower sent to the amp. Wide open (clockwise) everything up to 6k makes it through.
The magical Q boosts the frequency that the filter is set at. If you have a 2-position Q, then the boost is (typically) 8dB.
Now, about the strings: Flats do NOT kill the tone, they change the tone. The only thing that will KILL the tone are bad strings. Flats will have a more old-school sound or more of an upright bass sound - less edge. I personally use Thomastik Jazz Flats. I tried the D'Addario Chromes and love the E-A-D-G but the B was dead on every set I tried.
Lighter gauge is only a mistake if your ears tell you it is. Lots of folks in the club use light gauge and love them. I still prefer 45-130 for my fretted basses (the Jazz Flats only come one way).
Other than tone, the only difference between Flats and Rounds on a fretless is how quickly they eat up the fingerboard.
Pick a set, play them for a while, then discuss with someone whose opinion you trust what is lacking the tone you're getting out of the bass. It's all trial and error - we've all done it - and we're all still doing it. Enjoy the ride!
C-Ya..............wayne