outside button to inside button Q: only if you make the "shank" inbetween, or else there won't be any room to button. you'll need a little space between, and it probably needs *some* yarn in the sewing so it doesn't fall out of the garment...
yarn or thread Q: it also depends on the size of the holes in the button, and the weight of the yarn. PErsonally I most often use thread, but with large decorative buttons I use the yarn.
did I say one project at a time?