About the bug, What size would you say it was? if it was 14-18 I would say it was a sulphur. If you had a picture I could tell you what it was. But really and some others on here will disagree with this comment. But on the Clinch there are really only two kinds of dry fly fishing that are really hatches. 1- Midges, these things are tiny. 20-26 probaly even smaller. the 2nd is the sulphur hatch these are 14-18 size range and have been hatching good from what I hear. They can be a darker brown to almost white, I use a different paterns for them sometime a cdc caparaduns, sometimes sparkleduns, but most of the time just a normal caparadun works fine.
As for catching more fishing under a strike indicator, yes you will catch more! Bottom line, no ifs ands or buts about it. Now the important part, try using a small bit of yarn, I like lefty's secret strike indiacators, comes in a yellow film container and little river sales it. Good stuff, no worst then casting a dry. If you arn't close to them call and order. You'll have it the next day. Also, sounds to me like you're fishing on the 'swing" that's what it's called when your drift is done. Yes, you'll find fish that will eat fishing like this, but if you learn how to dead drift, and mend line you'll catch 10 times as more. Youtube dead drifting and line mending. if there's any kind of drag on you're line they usally won't eat. Drag is where your fly line, drags the line and indicator down the river. Dead drifting is where line indicator and fly is moving same speed as current. Take's a little practice and work but is well worth it! Hope this helps!