From the waist down, the body should be completely engaged, especially when first entering the pose. Light on Yoga sez tighten the legs; other sources say avoid tensing. The work of the legs is partially what makes it a dog pose (i.e. lengthening the backs of the thighs and calves), but I also think it's important to keep the legs and buttocks working to stabilize the lower back. My impression is that the important action of the pose is pressing into the hands and opening the chest while keeping the shoulders down...more than getting a deep arch in the lower back. I always do Up Dog with my toes curled under, but I see many pictures in the online resources with the tops of the feet pressed to the floor. Not sure that matters--but let me know what y'all think.
I don't see the issue of elbow placement addressed much, altho most pictures show the inner crease moderately or completely rolled forwards. I wish I could remember where I read the suggestion to have the the creases face each other to protect the wrists, because it really does prevent you from locking your elbows and more deeply engages the pectorals. However, if it is painful to do it this way, by all means, adjust.
Any other thoughts about all of this?