The star nut is inside the fork, and can stay there, but has nothing to do with the stem. Depending on the angle you might gain some height by inverting the stem, or replacing it with one with more rise - the rise angle will be 17 degrees + the stem angle, so a 17 degree stem will rise at 34 degrees (or be horizontal with the angle down).
If you still need more height there are a few builders what will make you a high angle stem, but that can be very pricey.
There's no real of thumb for bar height, though most would agree that saddle height or lower is preferred. I t's really about getting a comfortable position. If you can gain more height by flipping the stem, do so. Otherwise I suggest visiting a knowledgeable dealer and getting a fit consult before spending any serious dough on new hardware.
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