I feel like St Paul [as one born out of time], in coming on this fascinating thread so long after anyone has added to it. Thanks, AWAD, for leaving it up for me to see, however belatedly.

There's not a musical difference between line and space notes; it's strictly graphical, as you pointed out.
There's an operational difference if you play a Wheatstone concertina. [BTW, Wheatstone himself regarded his concertina as much more important than the eponymous Bridge.] The notes on the lines are played with the right hand, and the notes in the spaces with the left. It gets a bit tricky with sharps and flats, and too bad if your 4-part harmony requires 4 notes all on one or the other! [Both thumbs and both little fingers are required to hold the instrument.]

Being able to state categorically whether a note is on a line or space leads to numerous, more highly complex notational reading skills, such as recognizing scale patterns, recognizing repeated notes, recognizing intervals, passing tones, chords, and so on.
Unfortunately my sight-reading skills never got that far. Why, I don't really know: except perhaps in what lessons I had, there was more emphasis placed on mastering the particular instrument I had at the time, and pre-war my parents couldn't afford much. And I can't understand why those skills haven't improved since, despite a fair bit of effort.

This should shed a little light on what some issues there are... or at least some of the limits that WW is working within as a music teacher. It seems her creativity (which, BTW, I applaud) to take things outside the "box" is the most rewarding part (as it has been for me)... which says a lot about the "box".
There's been a huge amount of effort put into inventing new languages for improving communication among peoples. I wonder why there's been so little AFAIK put into improving musical notation? Surely if we were starting from scratch, we could work out a better method?

Long ago I remember reading words for the upbeat--and other words related to the beat of the baton, but I failed to learn them. If anyone knows these rare words, I would be very interested in reading them here.
I think I've seen them, I think I know what book to look them up in, but I wish I knew where in my apartment that book is...
I do recall that if a phrase begins before the down beat, the note(s) before it are called an 'anacrusis' [one or two unstressed syllables prefixed to a verse properly beginning with an accented syllable--WCD 5th Ed].

musicians start counting from 1 instead of zero!
And when they get to the end of the bar [measure, in US English] they start over again!