Is there a reason why the hair at the top of his tail is so short? I mean, does he rub it out or something? If he's rubbing, maybe try a dewormer that handles pinworms. If he just has dry skin and is itching, I've used baby oil to moisturize the tail. MTG works for skin irritations, too, and can jump start hair growth.
I have seen tails with the upper portion of the tail pulled or clipped, as opposed to braided. I'm not crazy about the look personally, but it may be an option.
To do either flat or button braids, the mane needs to be thinned and shortened for the right effect. I'm picky about my guy's long mane, so I do this kind of braid:
I get by in shows with it, and it's actually getting more common to see the french braids in the ring, even in hunter classes, in my area.
Thinning shears may work on a long mane, but I've never tried it.
*Pics not mine*