Rebuilt 904 w/ tf2 shifting woes...

Your transmission has to disengage 2nd at the same time its engaging 3rd.

A flare is caused by the timing of that shift being off. Band adjustment has an effect on this timing (so does pressure, to an extent). You don't want any flare on the shift. It's basically like slipping the clutch for way too long in a manual trans and will cause excessive wear.

Pressure will make it shift faster and firmer, which is good. Less chance for slip, and thus less wear.